posted on Jul, 15 2011 @ 09:28 PM
Another ruling by the Supreme Court that impacts Social Security is Flemming v. Nestor
Flemming v Nestor
The Court ruled that no such contract exists, and that there is no contractual right to receive Social Security payments. Payments due under
Social Security are not “property” rights and are not protected by the Takings Clause of the Fifth Amendment. The interest of a beneficiary of
Social Security is protected only by the Due Process Clause
He appealed the termination arguing, among other claims, that promised Social Security benefits were a contract and that Congress could not renege
on that contract. In its ruling, the Court rejected this argument and established the principle that entitlement to Social Security benefits is not
This case basically ruled that SS benefits are not property protected by the Fifth Amendment. Therefore the money you paid into SS is just another tax
attached to a political promise that can be reduced, denied, or changed in any way at a political whim.
Obama did a good thing by attempting to scare the masses dependent on SS and other entitlements. He proved once and for all that there is no
segregated "trust fund" that these payments come from. So where did it go?
Also as far as what is considered the "trust funds", it's actually a component of the "debt subject to the debt limit" the two components of this
are "publicly held debt" (mostly T-Bills, Notes, and Bonds) and intra-government debt ( these are the IOUs given by Treasury to the SS and Medicare
administrators). There's also another funny thing about those IOUs they aren't normal marketable Bonds, Notes, and Bills that can be sold on the
open market for the going rate and they don't pay coupons in cash. The IOUs held by the SS and Medicare administrators can only be redeemed by
Treasury. If they were to be redeemed SS or Medicare would have to go to Treasury, and then Treasury would either give them the cash from current
accounts or more likely issue debt to get the cash to give to SS. Since the intra-government debt would go down and the debt held by public would go
up by equal amounts the effect on debt subject to debt limit is a net zero. So why is it possible that SS may not pay out next month unless the
President doesn't want it to or those funds have been looted?