By Tom Kiser

This may fall into the category of kibbitzing about a technicality that no one cares about, but the United States Federal Government, as the issuer of our fiat money, cannot collect amounts of that same money and hold the money for future use. If money is collected regardless of by what method then the money must be spent near-real time, regardless of for what purpose, else the money “disappears” from the system…..as if it went into a financial black hole.

On the other hand, commodity money such as gold or silver could be collected and stashed away to be used later–even years or decades later. Fiat money is representative money, not commodity money.

Now, if the Social Security Administration had been allowed to invest their excess revenue that was collected in things that have natural material value–things such as a Petroleum Reserve or warehouses filled with industrial metals of various kinds–even scrap metal and junkyards–things for which there is an ongoing market–that would be a different matter. The money itself would continue to circulate and the trust fund wouldn’t be the sad, sick joke on the American people that it is since it consists of nothing more than Treasury notes–IOU’s that are backed by the American people. Full faith and credit notwithstanding. The assets could then be traded and sold on an ongoing basis and as needed. The worth of a diverse portfolio of commodities would likely track the producer price index fairly closely.

Of course, that would do away with one area where the folks in Washington can play make believe and play ongoing fantasy league political games. Reality is really bad for partisan politics.

The problem with having collected an excess of FICA taxes is the fact that the money is being and has been collected; not that it has been spent after it was collected. Both parts of the cost of the payroll tax have been an added operating overhead cost burden for the nation’s employers. Many of them have exported their factories and the jobs they once provided. By doing that, they have made themselves better able to compete for retail shelf and floor space worldwide–including in the US.

If we are to recover from what our federal government has done to us, we must be willing to suck it up, cut federal spending by at least 50% and do the best we are able to keep our nation afloat long enough to be able to restore stability. (Fat chance!)

It is not the federal government that provides Medicare, Social Security, etc. The nation’s economy is the provider and the federal government manages and administers the delivery–including “administering” the losses that are due to waste, fraud and abuse–and the added operating cost of gross inefficiencies.