Jake Towne - Social in Security Talk in Palmer (June 2010)

TowneForCongress.
com
June 2010
Social Security...
or Insecurity?
by Jake Towne
“An invasion of armies can be resisted, but not an idea whose time has come.” - Victor Hugo
TowneForCongress.com
June 2010
Social Security...
or Insecurity?
by Jake Towne
Agenda
History of Social Security
Problems
Solutions
“An invasion of armies can be resisted, but not an idea whose time has come.” - Victor Hugo
Agenda
History of Social Security

Problems
Solutions
A Free Lunch??
On January 31, 1940, the first
monthly retirement check was issued to
Ida May Fuller of Ludlow, Vermont, in
the amount of $22.54. Miss Fuller, a
Legal Secretary, retired in November
1939. She started collecting benefits in
January 1940 at age 65 and lived to be
100 years old, dying in 1975.
Ida May Fuller worked for three years
under the Social Security program. The
accumulated taxes on her salary during
those three years was a total of $24.75.
Her initial monthly check was $22.54.
During her lifetime she collected a total
of $22,888.92 in Social Security
benefits.
http://www.ssa.gov/history/briefhistory3.html#idamay
First Insolvency - 1977
“This legislation will guarantee that from 1980 to the year
2030, the Social Security funds will be sound."
- President Jimmy Carter
Raised FICA Tax from 2% to >6%
Second Insolvency - 1983
“Government is not the solution to our problem, government
is the problem."
- President Ronald Reagan
Accelerated FICA Tax Raise

Raised Full-Benefit Retirement Age
CPI Manipulations Begun to
Decrease Payouts
Consumer Price Index Changes
CPI Changes
Basket Weighing Changes
“Let Them Eat Hamburger”
“Intervention Analyses”
The “Thrill” of Hedonics
Bottom Line – SocSec payments
should be nearly DOUBLE to make up
for purchasing power contributed
http://www.bls.gov/cpi/cpidryer.htm
http://www.shadowstats.com/article/consumer_price_index
http://towneforcongress.com/economy/unlocking-the-money-matrix-the-real-interest-rate-part-1215
Cash-Based vs. Accrual-Based
Accounting
Cash-Based

Revenue recognition: Revenue is recognized when cash is received.

Expense recognition: Expense is recognized when cash is disbursed.
Accrual-Based

Revenue recognition: Revenue is recognized when revenue is earned.

Expense recognition: Expense is recognized when incurred.
Ex. - Merchandising firm 30 days net

GAAP (Generally Accepted Accounting
Principles) only accepts accrual-based
Cash-Based vs. GAAP Budgeting
http://www.fms.treas.gov/fr/09frusg/09frusg.pdf
http://www.shadowstats.com/article/282-federal-2009-gaap-accounting
SS Beneficiaries per 100 Workers
1970-2083
Page 162/254 http://www.gao.gov/financial/fy2009/09frusg.pdf

Social Security and Medicare
Unfunded Liabilities = $107T
Page 178/254 http://www.gao.gov/financial/fy2009/09frusg.pdf

Unsustainable
(even on a non-GAAP basis)
30% of Inlays 37% of Outlays
http://www.irs.gov/pub/irs-pdf/i1040gi.pdf
1040 Instructions Page 101/105
“Inlays”/Tax Revenue Dropping
http://www.fms.treas.gov/fr/09frusg/09frusg.pdf
Page 29/254
Traditional “Political” Solutions
“Kick the Can” Strategy
Inflation Tax + CPI Alterations
Raise Retirement Age
Raise Payroll Tax Rate
Raise Payroll Tax Maximum
http://www.lewrockwell.com/north/north790.html
Practical Solutions
Start With the End in Mind
Acknowledge the Social Contract
Theft of Current Generation's Pay
Robbery from Current Recipients of
Purchasing Power Paid In
Practical Solutions
Make Social Security Voluntary
Gradual Phase-Out
i.e. 100% for 60+, 90% for 50+, etc.
Cut Taxes to Increase Societal Wealth
Slash Federal Spending to the Bone
Military Expenditures
Redundant Departments
Q&A
Graphics Acknowledgements
Unless listed below, all photos are either mine or public domain.

The “Towne 2010 – As Good As Gold” logo was created by Derek Wyatt

The Jake Towne for United States Congress logo was created by Anthony Geist
Document Copyright
Copyright © Jake Towne, 2010. Any portion of this presentation that could be
copyrighted is owned by myself and I hereby released it to the public domain. I
grant full permission to use any of the ideas or material within. You may republish
this work. Attribution to myself is appreciated but not required.
Replace the Socialistic Keynesian Government
Status Quo with the Austrian Free Market
Keynesian Economics
The “Money Power” is held by the
Government & Bankers
Government 'Commands' the Economy
Renown for Deficit Spending and
Stealing via Currency Debasement
Redistributes Wealth to the Military-
Industrial Complex, Banking Cartels,
Special Interest Groups & Corporations
Allows and Rationalizes Government
Takeovers of Private Businesses “In the long run, we are all dead.”
May promote “capitalism” and the “free
market” in word, but in deed functions as - Lord John Maynard Keynes
British Economist and
“Crony Capitalism,” “Vulture Capitalism,” the Central Planner
“Corporatocracy” or “Disaster Capitalism”
Replace the Socialistic Keynesian Government
Status Quo with the Austrian Free Market
Austrian Economics
The People own the “Money Power”
Government Plays No Role in
Economic Planning
Promotes Honest Money & Balanced
Budgets
Highly Rewards those who Create
Wealth and Shares it with All
“All those intent upon Government Does Not Takeover
sabotaging the evolution
towards welfare, peace, Private Businesses
freedom and democracy, Promotes Free Market Capitalism
loathe gold.” and laissez faire, or “let them be!”
- Ludwig von Mises economics
Founder of the modern
Austrian School

Jake Towne - Social in Security Talk in Palmer (June 2010)

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History of Social Security

Raised FICA Tax from 2% to >6%

Accelerated FICA Tax Raise

Ex. - Merchandising firm 30 days net

Page 162/254 http://www.gao.gov/financial/fy2009/09frusg.pdf

Page 178/254 http://www.gao.gov/financial/fy2009/09frusg.pdf

30% of Inlays 37% of Outlays

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