"Conspiracy To Defraud And How To Recognize It"

[VioletLake]

I found this article a little while ago, and I'm having a little trouble understanding the argument. Can someone please explain it in simple terms? Also, I'm wondering what you think about the source.

Conspiracy To Defraud And How To Recognize It
By Ed Henry
http://www.thepriceofliberty.org/04/04/13/henry.htm

In short, the federal government has for decades used the concept of trust funds to set up the pretense of "borrowing" entitlement surpluses—overcharges that, instead of going toward the purposes for which the public was taxed, have been stolen by the government and spent elsewhere. To carry out this pretense of borrowing, the government puts bogus bonds in equally phony trust funds and even adds annual interest to these accounts increasing public indebtedness. The interest is paid without money or cost to the government, but by simply depositing more bogus bonds in the respective accounts.

No part of the nation's debt can be paid off without using taxpayer money. That's what makes the honest sale of U.S. Treasury securities to investors, both foreign and domestic, the "safest investment in the world." That's also what makes the "Intragovernmental Holdings" phony trust funds a method of double taxing the public without legislation and, in most cases, without the taxpaying public even realizing that it's happening.

[skids]

1. Not sure about the accuracy of the source...

...but what the author is claiming is this:

When the government collects a tax that is "earmarked" for a certain purpose, the money is put in, well to keep it simple, an account. Now, if we just put cash in an account we could expect to earn interest on it. That is to say, we could lend bits and peices of the cash out, and collect interest as the person we lent it to payed it back.

The author is saying that this is not what is happenning. Instead of lending the money in those accounts to people who will pay it back, we are lending it back to the government, which allows the politicians to spend money without raising taxes. But eventually that money has to get payed back, and the government doesn't have any way to pay it back except to use our tax dollars. So the government has not only spent all the tax money it has collected, but also the tax money from future years which it has not even collected yet. And given the self-loan, I would guess that there will be no or very little interest payed back -- either way it is you and I who will be paying it back.

[VioletLake]

2. I read that China buys $1 billion in Treasury Bonds every day.

Seems like they're buying our future.

Thanks for the concise explanation. :)

[Mairead]

3. Restating Skids post in a slightly different way...

If tax money is collected for social-security (for example), there's actual, spendable money involved, sitting in the bank.

If the politicians then grab that money and move it to the general budget account, replacing it with Treasury bonds (which have no current value because they're essentially promissory notes that don't come due til some time in the future), they've basically raised taxes in an underhanded way.

They've spent money they shouldn't have touched today (the money that was meant for social security, in the example), and put off the day of reckoning by substituting paper that, while currently worthless, eventually will have to be paid off by increased taxes.

It's a cross between running up credit-card debt and emptying the kids' piggy banks. Very close to theft, by my reckoning.

[VioletLake]

4. The argument sheds some light on our "struggle" in the ME.

Thanks for your effective explanation. :) I never really paid attention to this sort of thing before.

[VioletLake]

5. BTW, I'm also interested in what you think about the argument.

I guess I should have put that in the original post. It seems like this can potentially lead to an interesting exchange of opinions in any number of directions.

[VioletLake]

6. Last kick before letting it sink... n/t