"These self-anointed intellectuals are people who think that those who believe in God and Jesus Christ, those who 'cling to their guns and their religion,' are a lower form of animal life, while they, themselves, have no problem whatever accepting Obama as a messiah and, in the past, deifying the likes of Jimmy Carter and Bill Clinton. Let's face it, when you kneel in a church, you're accepting that there is something greater and wiser than yourself in the universe. When, on the other hand, you kneel to a left-wing politician, you're merely emulating Monica Lewinsky." --columnist Burt Prelutsky

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Why did Bernie Madoff go to prison? To make it simple, he talked people into investing with him. Trouble was, he didn't invest their money. As time rolled on he simply took the money from the new investors to pay off the old investors. Finally there were too many old investors and not enough money from new investors coming in to keep the payments going. Next thing you know Madoff is one of the most hated men in America and he is off to jail.

Some of you know this .. but not enough of you . Madoff did to his investors what the government has been doing to us for over 60 years with Social Security. There is no meaningful difference between the two schemes ... except that one was operated by a private individual who is now in jail, and the other is operated by politicians who enjoy perks, privileges and status in spite of their actions.

Do you need a side-by-side comparison here? Well here's a nifty little chart.

Now that was just spectacular. I'm guessing nobody has managed to present this situation to you with such crystal clarity before. Must be the SAM-e.

OK ... I've understood this scheme for some time now, so just what was it that almost slipped by me? For some time now we've been told that it would be 2016 or 2017 before Social Security started paying out more money than it was taking in. Well ... we're here. In 2009 the economy forced many more people than expected into retirement. These people filed for their Social Security benefits. Last year Social Security durned near ran out of money. The benefits paid almost exceeded the taxes collected. There is, of course, no "trust fund" to go to. That money has been spent. For Madoff that was a crime. For our politicians, it wasn't. Now the chief actuary of the Social Security system says that we're going to "go negative" for the next year or two.

Now the politicians will naturally be looking for a solution. They cause the problem because they just couldn't stand seeing all of that money sitting in the trust fund. They just had to get their hands on it ... and leave behind some IOUs. Now the IOUs are due, and there's no money to pay them off. The solution? Well, they'll probably have to raise the retirement age. Then they may well introduce means testing. They'll tell retiring seniors who have done well with their own retirement plans that they may well lose their Social Security benefits. Can they do that? Oh hell yes they can. There is no federal law which guarantees Social Security benefits to anyone who has been forced to pay the taxes.

Then, of course, they'll try to raise the Social Security taxes. The earnings cap for this year is $106,800. My best guess is that the Democrats will propose a change in the law that allows the current earnings cap to stay, or to possibly adjust it to $100,000. Then they will give all income between $100,000 and $250,000 a year a pass .. then all incomes above $250,000 a year will be taxed with no further caps.

1 : a person who holds the view that any ultimate reality (as God) is unknown and probably unknowable; broadly : one who is not committed to believing in either the existence or the nonexistence of God or a god
2 : a person unwilling to commit to an opinion about something <political agnostics>

Feb. 11 (Bloomberg) -- President Barack Obama said he is “agnostic” about raising taxes on households making less than $250,000 as part of a broad effort to rein in the budget deficit.

Obama, in a Feb. 9 Oval Office interview, said that a presidential commission on the budget needs to consider all options for reducing the deficit, including tax increases and cuts in spending on entitlement programs such as Social Security and Medicare.

“The whole point of it is to make sure that all ideas are on the table,” the president said in the interview with Bloomberg BusinessWeek, which will appear on newsstands Friday. “So what I want to do is to be completely agnostic, in terms of solutions.”

Obama repeatedly vowed during the 2008 presidential election campaign that he would not raise taxes on individuals making less than $200,000 and households earning less than $250,000 a year. When senior White House economic adviser Lawrence H. Summers and Treasury Secretary Timothy F. Geithner suggested in August that the administration might be open to going back on that pledge, White House press secretary Robert Gibbs quickly reiterated the president’s promise.

In the interview, Obama said that putting preconditions on the agenda of a bipartisan advisory commission, which he said he would soon establish, would just undermine its purpose.

“What I can’t do is to set the thing up where a whole bunch of things are off the table,” Obama said. “Some would say we can’t look at entitlements. There are going to be some that say we can’t look at taxes, and pretty soon, you just can’t solve the problem.”

Politically Risky

Many economists, including conservatives such as former Federal Reserve Chairman Alan Greenspan, argue that tax increases will be necessary as part of a broad package to control the deficit, which the White House projects will hit a record $1.6 trillion in the fiscal year ending on Sept. 30.

Obama said the U.S. was faced with a “structural deficit” that was in place before the recession began and that was only made worse by the deepest drop in the economy since the 1930s.

Revenue ‘Mismatch’

“Our real problem is not the spike in spending last year, or the lost, even the lost revenues last year, as significant as those are,” he said. “The real problem has to do with the fact that there is a just a mismatch between the amount of money coming in and the amount of money going out. And that is going to require some big, tough choices that, so far, the political system has been unable to deal with.”

The administration hopes the bipartisan commission will make it easier to produce a comprehensive plan to reduce the budget gap to a sustainable level, often described as 3 percent of the overall economy, by 2015.

The White House decided to set up the group on its own after the Senate blocked a measure to establish a congressional panel whose recommendations would have been guaranteed a vote by lawmakers. Opponents, including a majority of Senate Republicans, complained that the plan would result in tax increases and that Congress wouldn’t have a chance to amend the panel’s recommendations. Under a presidentially appointed commission, Congress could ignore any panel recommendations.

Republican Skepticism

House Republican leader John Boehner has expressed skepticism about the Obama commission and has sought assurances from the White House that its makeup would be bipartisan and not predisposed to tax increases. The Ohio Republican said he is still considering whether to appoint members from his party to the panel after a Feb. 9 meeting with the president.

The Obama administration’s budget already takes that route with its proposed $970 billion tax increase over the next decade on Americans earning more than $200,000 a year, largely by not extending former President George W. Bush’s tax cuts for the wealthy beyond 2010.

Even with those revenues -- and a proposed three-year freeze on some discretionary spending by the government -- the administration still projects a deficit of $752 billion in 2015, equivalent to 3.9 percent of gross domestic product.

That’s above the 3 percent mark that White House budget director Peter Orszag has said is necessary to stop the rise in government debt as a proportion of the economy.

Budget Gap

Analysts say that middle-class taxes will need to be increased because the government can’t raise enough money from the wealthy alone to close the budget gap. “It’s just not possible to get the revenue you need only from this group,” said Joel Slemrod, director of the Office of Tax Policy Research at the University of Michigan.

Going back on his campaign pledge would be fraught with risks for Obama. Former President George H.W. Bush paid a steep political price when he abandoned his 1988 campaign promise not to raise taxes, losing out in his bid for a second term to Bill Clinton.