The Federal Government does for its employees...what it will not do for its citizens

For some time now, the People's Open Opposition Party has been recommending that federal trust funds, all 168 of them of which Social Security just happens to be the largest, be turned over to trustees in the private sector. Excess or "surplus" contributions that come in through extra FICA taxes, gas taxes, airport taxes and other entitlements be turned over monthly to investors in the private sector.

Instead of the indebtedness and double taxation caused by the current substitution of "special obligation nonmarketable bonds" for real cash that is stolen by Congress and the Administration, investing these funds by unbridled people in the private sector would allow the money to work for us, the citizens and beneficiaries of trusts. We would gain instead of lose money. And we would not be paying the same tax twice.

This is the solution to Social Security's nonexistent "problem." It is a solution that the federal government refuses to acknwledge or face---even though they do it for themselves and their employees.

FERS: The Federal Employees Retirement System

Since the second term of the Reagan Administration, new federal employees (including Congress and the Cabinet) have been enrolled in FERS instead of the Civil Service Retirement System. The latter, representing about two million federal employees during its peak, including postal workers, has been phased out. While it is still the second largest trust fund on the books, it has merely been collecting interest since that time.

At the close of fiscal '98, the CSRS Trust Fund held $450 billion in nonmarketable bonds. Compared to Social Security's $739 billion at the same time, representing extra retirement money for some 139 million American workers, the disparity is obvious and a good reason to change before the public has another reason to revolt.

The new retirement plan includes federal employee contributions to Social Security as well as other special "annuities" provided by the government, but it also includes a Thrift Savings Plan (TSP) that is important at this point.

TSP: The Thrift Savings Plan

The Thrift Savings Plan comes in three flavors, G-C-F, or the G-Fund, the C-Fund and the F-fund where employees can voluntarilly contribute to their retirement in any or all of these plans. Thus, federal employees may participate in a tax deferral plan much like the public's "let them eat cake" 401Ks except that, in this case, where the funds are invested is definitely predetermined instead of being left up to the whim of your employer or union.

The G-Fund involves government securities investment much like all other trust funds except that these are short term marketable bonds, bills, notes or securities guaranteed by the "full faith and credit of the United States" meaning the taxpayers.

The F-Fund also involves government securities but this time it includes mortgages all over the place from Fannie and Ginnie Mae to municipal bonds. It's the next fund that is most popular with employees.

The C-Fund stands for "Common Stock" investment. Federal employees are allowed to invest in the stock market much like we have been recommending ought to be done with all of the Social Security "surplus." Federal employee contributions to this fund are turned over to an investment group in the private sector. An investor that uses an index of the top 500 listing from Standard and Poors.

GUESS WHO
your government has picked to manage stock investments for its employees

In its infinite wisdom and sound judgement, your federal government has reverted back to the mother country and chosen a British firm to invest its employee's money in the New York Stock Exchange. Avoiding all favoritism from selecting an American investment firm, your federal government has chosen the Barclay Bank of the United Kingdom. Doesn't that frost your cajones? We're paying commission to a British bank to invest in our stock market.

..........Here's the last four years of gain on investment for federal employees contributing to this plan:

And what was the gain for 139 million working Americans who, in fiscal 1998, contributed $55 billion in extra excess or "surplus" contributions to Social Security alone?

Minus 100%

Congress and the Administration confess to stealing our $55 billion, spending it to bomb Iraq, bail out the IMF who screwed up on loans to third world nations, pork barrel ventures and other spending wherever they damned well pleased. They then left the Social Security Trust Fund with certificates of indebtedness, promissory UOU notes, or what they call "special obligation nonmarketable Treasury bonds" that only you or your children can pay off in future taxes. Wasn't that nice of them?

Total trust fund indebtedness now accounts for 34% of the national debt or more than $1.9 trillion worth of these double taxation future tax bonds. Aren't you overjoyed with what they do with your retirement, Medicare and other entitlement money???

NOTE: The People's Open Opposition Party has consistently maintained that there is no need to hire an outside investment company, bank or firm---nor should we pay commissions to anyone. Hiring or electing competent investors from the private sector, setting them up as a trust fund doing no business other than that of the trust, and managing the billions of dollars in "surplus" flow is enough. A trust fund the size of Social Security's would have sufficient income for investment, approximately $6 billion per month at present, to allow this trust to purchase its own seat on the New York Stock Exchange. Such a trust could then handle buying and selling stock for all of the other trusts, including the Federal Employees Retirement System account.

ANTINOMY