From the April 2004 Idaho Observer:

Social Security “us” and government retirment “them”

by Don Harkins

Have you ever noticed that people who retire after 20 years of public service are often in their mid-to-late 40s, have nice homes, late-model vehicles and do not seem to have trouble maintaining the level of affluence they attained while allegedly working in their public capacity? Have you noticed that retired government employees travel a lot, have expensive toys and have the time, money and good health to enjoy expensive hobbies?

Have you also noticed that people who had Social Security taxes withheld from their wages for 40 years are in their 60s, in poor health, must live in low-rent housing, have old, ill-repaired cars (if they can afford one at all) and find themselves getting poorer and poorer until all they can afford is a small apartment, electricity and inexpensive, starchy foods?

There is a social, political and mathematical reality to the equation above. The bottom line is that the bureaucratic class utilizes modern investment strategies to earn at least six percent interest for public employee retirement funds. Rather than protecting and investing wages automatically deducted from working class paychecks as Social Security taxes, the same bureaucratic class spends it as fast as it comes in.

Comparative analysis

So what happens when money deducted from people's paychecks for Social Security is treated like money deducted from the paychecks of government employees for their retirement plans?

“A Tale of Two Bribes” is an eight-page exploration of the disparity between state and federal public retirement systems and the Social Security system by long-time financial freedom advocate and monetary system historian Anthony Hargis of Fountain Valley, California.

According to Hargis, “200 million Americans are persuaded to pay an average of $4,000 a year for 40 years so they can receive $5,000 to $10,000 per year for five to 10 years.

“In other words, the average working American will pay $160,000 in SS taxes -- during the best 40 years of his life -- so he can receive $50,000 to $100,000 during the worst 10 years of his life,” Hargis asserts.

Conversely, public employees may or may not be required to contribute to their own retirement plans, leaving, in many cases, the entire burden of their retirement funding to the taxpayer.

Government employees are eligible to retire after 20 years of service with monthly benefits equal to 75 percent to 100 percent of their final pay.

If a government employee retires at age 50 with $5,000 per month his ending salary, he can expect to receive $3,750 per month. That equates to retirement benefits of $45,000 per year, or $1.35 million over 30 years.

Not a true retirement plan

If we use government retirement plans as a model, the SS system is not a true retirement plan at all. “If we factored in accumulated interest of six percent to a workers' monthly SS contributions, his “trust account” would contain about $630,000.

“If the SS were a true retirement system, a private worker's accumulated principle would be earning over $18,000 in its 30th year,” Hargis stated.

If a person diligently put 10 percent of his wages into an account that earned six percent interest, he could retire at a much earlier age and maintain the level of affluence he attained during the productive years of his life. He would also be healthier, happier and in a position to afford hobbies and other activities that make the last 20 years of a person's life a rewarding experience rather than a punishment, for a lifetime of work.

However, as it stands now, retirement-confident government bureaucrats automatically deduct SS taxes from employees' wages and employer bank accounts. Because the American people allow the government to mismanage their retirement funds, they will lose $630,000 to recover $100,000. Per this arrangement, American workers may look forward to being impoverished from the moment they retire to the day they die.

But it gets worse

Last Month Federal Reserve Chairman Alan Greenspan suggested that Congress cut SS benefits to ease the fiscal pain of government budget deficits.

Greenspan did not advise Congress to cut back on pensions for government employees.

Greenspan did not suggest that government place SS funds in trust to the personal account of the contributor and manage the funds to earn six percent interest so the accumulated wealth can be made available to that person upon retirement.

Remember that government retirements are paid for largely by taxpayers. Since government cannot keep its hands off pots of money, government retirement accounts are continually being replenished and depleted in cycles of taxing and spending. This means there are no “real” individual retirement accounts on deposit accruing interest and that begin paying out to the government employee upon his retirement; there are only tax liabilities.

Because government is obligated by contract to pay an average 75 percent of its retired employees final wages for the rest of their lives and there is no money on account to make those payments, government must tax the working class to pay its retirees. “By this practice, money will have to be taken from workers 20 to 30 years in the future to pay the retirement benefits of workers today. It is a process of parents cannibalizing their children,” Hargis observed.

The sacred SS cow

The disparity between government retirements and worker's retirements is large. Where government retirees receive between $30,000 and $150,000 each year for up to 30 years, SS retirees receive between $5,000 and $10,000 each year for an average of 10 years.

The philosophical gulf widens when you consider that plush government retirements are afforded by the taxpayers whose SS retirements are meager by direct comparison.

“It would seem that the only ethical thing to do would be to totally abolish the SS system,” said Hargis.

But to abolish the SS system and monthly SS payments, which is what millions of Americans have worked their entire lives toward, would likely result in riots, observed Hargis. “You see, the American working class apparently does not mind losing the $530,000 they should have on account for their retirement; it's the thought that they may not get that $100,000 that gets them worked up,” he added.

Why is the SS cow so sacred?

Historically, the masses have been exploited by those who have power over them. The exploitation has been accomplished through a variety of mechanisms throughout the centuries. Governments have learned that progressive taxation is more efficient than placing people directly into chains. Better yet, governments have learned that people are much more willing to accept a tax when they perceive it as a benefit to themselves, as in Social Security.

Governments are also keenly aware that oppressed peoples have a tendency to tolerate oppression, but only up to a point and then they rebel. History is replete with examples of the oppressed rising up to smite their oppressors.

To avoid such a fate for themselves, our oppressors have taken great pains to condition Americans to accept the belief that Social Security is the only pot of gold available to them at the end of their lifetime-of-working-and-living rainbow.

It is apparent that the illusion is becoming more and more difficult to maintain. Whereas Americans born in the 60s and before did not receive their SS card until they applied for their first job, SS numbers are now issued to hospital-born babies at birth.

About Anthony Hargis

For over a decade Hargis has been offering clients an alternative to the money monopoly operated by the privately-owned Federal Reserve Banking System. On March 15, 2004, Hargis was arrested because he refused to provide the U.S. Department of Justice and the IRS with records of his “warehouse bank operation.”

The government is accusing Hargis of masterminding an “an abusive tax shelter operation.”

Hargis is a passionate and principled man with an intense gaze. Many years ago he began researching the money system. He found that the Federal Reserve System is based upon indebtedness. He also found that the money managers are intentionally increasing our personal and national levels of indebtedness. Years of research led Hargis to believe that current money policy in the U.S. is a process of “cannibalizing” our future generations; a process which assures our children will inherit our fiscal irresponsibility as economic enslavement.

His banking operation is simple: Businesses and private parties could make deposits and have their money transferred into gold-based accounts. The money could then be turned back into Federal Reserve Notes whenever depositors needed cash.

What Hargis did was merely duplicate precisely what banks in the U.S. are already doing -- with the approval of the Federal Reserve and the U.S. government . The difference being only that participation in his warehouse banking operation does not come with an in-house regulatory scheme that invades his clients' rights to financial privacy.

According to Hargis, the purpose of his banking service is not to help people evade taxes for which they would otherwise be liable, but to break the money monopoly held at this time by the equally private Federal Reserve bankers. Again, Hargis' motivation is the dark future he sees for our children if we allow the Federal Reserve bankers to continue bankrupting this nation and her people.

Curiously, at the March 15 hearing in Santa Ana that resulted in Hargis being taken into custody, Hargis attorney Peter Gibbons observed that “The judgment [against Hargis] was entered before the hearing.”

“California Central District Federal Judge David O. Carter ordered that Hargis must hand over his records -- before allowing Hargis to make his case,” reported George Kadar for The American Free Press.

Judge Carter gave Hargis a half-hour to decide if he would hand over his records or be immediately taken into custody and sent to jail for contempt (not for criminal charges associated with his banking operations).

Hargis did not require 30 minutes to decide and stated his position clearly for the record: “I am prepared to spend the rest of my life in jail,” and “I will rather go to prison than hand over my customers' records to the IRS.”

Hargis' research and his dedication to the future of his country is the power behind his selfless convictions in this matter. He has written rather extensively on the subject and has posted much of this material to his website at www.anthonyhargis.com.

He has also filed a lawsuit in federal court challenging the Social Security Act. Though no hearings have been held on this matter, briefs have been filed on both sides. One of the greatest betrayals of the public trust is our current Social Security System. An analysis of how “they” (the bureaucratic class) administrate “our” retirement funds -- as compared to how they administrate their own retirement funds -- provides excellent insight into how deeply government appreciates the working class who support its existence.