Former CO Gov Describes "Crime of the Century"
Former CO Gov Describes
'Crime Of Century'
By Frosty Wooldridge
Last month, I participated in the annual gathering of the Federation for American Immigration Reform (FAIR * www.fairus.org) in Washington, DC. Former Colorado Governor Lamm was a keynote speaker * giving us a STARTLING speech.
His national leadership in the immigration debate illustrates his far-reaching understanding of our greatest dilemma in the early years of the 21st century. Every social ill emanates from too many poorly educated, low-income people flooding into the United States * beyond our capacity to sustain them * or ourselves.
U.S. National Bankruptcy Possible?
Few Americans understand the Faustian dilemma awaiting their children with the federal deficit now at $8.7 trillion. Although Bill Clinton left office with a balanced budget, and precious little national debt * Mr. Bush raised the federal debt level to nearly $10 trillion in seven short years.
On an individual level, if you earned $50,000.00 a year, but ran up your credit card debt to $500,000.00 a year, how would you pay for your financial liability? Answer: you couldn't. Bankruptcy becomes your only option. However, what happens when an entire country bankrupts?
The dollar's value falls world-wide. Our annual trade deficit exceeds $700 billion. Our manufacturing base vanishes with millions of U.S. jobs outsourced overseas. Our government must borrow $2 billion each and every day to keep our economy afloat. Unbeknownst to most Americans, their tax dollars pay in excess of $400 million daily to pay the interest on the federal debt.
The greatest embezzlement in all of history
Governor Lamm said, "I have participated in the greatest embezzlement in all of history. In my seventy plus years, I have never seen such a perfect crime.
"Like most other master criminals, I am heady with success * and feel a need to brag. I kid you not * never before has one group appropriated as much money that belonged to another group in the history of crime.
"The victims, while they are increasingly suspicious, still do not know they have been had. It was literally and figuratively as easy as taking candy out of the mouths of babies."
To pull off a giant embezzlement, you need a naive patsy
Lamm continued, "Here is how we did it. The first rule of embezzlement is to find some naive patsy. We sensed forty years ago the younger generation was not paying enough attention to public policy, so we quietly found ways to maintain our lifestyle and charge it to the next generation * and their children.
"While those of you under 45 were preoccupied with other things, my generation dumped the largest load of debt on you that history has ever seen * and found ways to maintain our lifestyles on your credit cards.
"A good scam needs a compassionate come-on. In our case, we developed a new phrase: "poor elderly." To this day, most Americans do not understand that this is actually two words, and that "poor" no longer adequately describes the elderly as a class.
Ponzi scheme to benefit the oldsters!
"Next, we devised a number of systems that allowed us to charge our retirement to the next generation of Americans, who will wake up to find they are on the losing side of a Ponzi scheme," Lamm said. "Like all good con artists, we relied on "trust."
Trust fund; to benefit both Medicare and Social Security!
"We told them there was a "trust" fund for both Social Security and Medicare," Lamm said. "Of course, this was a lie. There is no "trust" fund, in the normal sense of the word, because we take this month's Social Security taxes from today's workers and pay them to today's elderly. Then, we tell today's workers not to worry * the money is being held "in trust."
But, there is no trust fund!
"In actual fact, they would be no better off if the fund was invested in confederate war bonds," Lamm said. "The trust fund is a sham because it only contains IOU's that tomorrow's generation of workers will have to pay off themselves.
"They will have to pay for both our retirement and a good part their own. We succeeded in taking money from poor workers in St. Paul and sent it to wealthy retirees in St. Petersburg, FL * and no one was the wiser."
The perfect embezzlement maximizes its take.
"We soon found there was money left over after paying the Social Security funds to today's elderly, and we did not want to stop half way," Lamm said. "What self-respecting crook would leave money lying in the bank vault after a robbery?"
Clever scheme; consolidated budget.
"We completed the job by something called the "consolidated budget," Lamm said. "This allowed us to quietly take the Social Security funds left over -- to reduce our taxes by spending the money on current government services. Under the "consolidated budget," we could legally "borrow" the money in the "trust fund" left over every year, and spend it on current government services; thereby, reducing our yearly taxes. Virtually every year for the last 40 years, we understated the yearly deficit and understated the total federal debt.
U.S. * $50,000,000,000,000 National Debt today, including interest
"Even though the official federal debt is approximately $9.5 trillion, the amount actually passed on to the next generation is closer to $50 trillion."
My generation * master embezzlers!
"The entire scheme was done with clever accounting gimmicks, which allowed us to minimize our taxes and maximize our spending while we passed the bill on to the next generation," Lamm said. "Like many victims of a crime, by the time they figure it out * I (older generation) will be long gone. I have completely and totally spent the Social Security Trust Fund and left nothing in trust, absolutely nothing, for today's workers to pay future obligations.
"They will have to either raise their taxes substantially, or dramatically reduce their benefits under the system. They have no other practical alternatives.
The true perfect crime only works once.
"Every dime spent on the war in Iraq we put on our kid's credit cards," Lamm said. "Every dime of Katrina and Rita hurricane recovery we put "off-budget" and thus left it to our children to pay.
"Then we voted ourselves a substantial tax-cut, the only tax cut during a war in our national history. If anyone quoted Milton Friedman, "If you cut taxes without cutting spending, you are not cutting taxes, you are deferring them to your children," we would quickly say we were 'stimulating the economy' and change the subject."
Eventually, the next generation will wake up to the magnitude of the fraud.
"They will recognize they are working long hours (or two jobs) and make less working than I make in retirement," Lamm said. "Yet, every month they transfer money to me to pay for my health benefits. I have plans for that also. When they start to blow the whistle, I will say with shock and horror, 'You can't start an intergenerational war.' I will tell them about how hard I fought for this country.
"I will shame them by accusing them of breaking the "generational compact," neatly covering the fact that it was my generation who "broke" the compact by leaving them an unsustainable and insolvent system."
Like any successful crook, I cover all my bases.
"When health care costs became a larger factor in our budgets, we found a system to subsidize our health care costs at the expense of following generations. We called it Medicare," Lamm said. "The average senior who turned 65 in year-2000 got back $4 from today's workers for every $1 that he/she paid into the system. Seven short years later, today's retiree receives on the average a $100,000 subsidy toward his health care costs * from a system that is slated to go broke not far into this 21 st century."
The story does not end there.
"My generation screwed up the savings and loan industry," Lamm said. "What did we do to get out of it? We issued thirty-year bonds! Why should I pay for my mistakes when there is a gullible generation right behind me? Will I be here in 30 years? No. Will you? I leave it to my kids to pay off. My wife and I bought our first house in 1963 for $11,900. Our first mortgage payments were $49 a month because we had a V.A. loan subsidized by the federal government."
Everyone in my generation could buy his or her own home.
"It is estimated that thirty percent of the current workers below age thirty will never be able to own their own houses," Lamm said. "I get more money in housing allowance every year from the federal government than the poorest American. I get to deduct my mortgage interest and real estate taxes, which is worth to someone in my income bracket more than the cash equivalent that any poor person in this state receives for housing. Ditto health benefits.
"By not taxing my health insurance paid for by my employer, I also receive more health benefits from the federal government than most poor children on Medicaid. I have recently passed Medicare Part-D to help pay for my prescriptions."
The Crime of the Century
As Lamm explained, "It's the crime of the century."
Richard D. Lamm is co-director of the Institute for Public Policy Studies at the University of Denver, and the former three-term governor of Colorado, from 1975 to 1987. His latest book: "Brave New World of Health Care."
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