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W e l c o m e !
Our Mission
Founded in 2002,
the Public Program Testing Organization (PPTO) is an all-volunteer, tax-exempt organization
dedicated to evaluating the effectiveness and efficiency of governmental
programs and not-for-profit entities. Our initial focus was directed
towards an evaluation of the United States Social Security system, and
proposals for reform of that system. Several items related to Social
Security can be found on this page and on the Social Security page. Other
issues explored on our Web site include Medicare, income taxes, and financial
regulation. The PPTO's findings are communicated via radio show
presentations, newspaper commentaries, direct communications with governmental
agencies and congressional leaders, and via this Web site.
Joe Fried, CPA, Director
Mayo Clinic, a role-model for health care, drops Medicare
patients (January 1, 2010)
Although cited by President Obama as a model
provider of good health care, the Mayo Clinic has decided to stop
accepting Medicare patients at one of its
primary-care clinics in Arizona. The decision, which will take effect
immediately, is due to U.S. government reimbursement rates, which Mayo says are
inadequate. The two-year pilot program will not affect patients in other states.
Read
More>>
Is Medicare really a model for health insurance reform? (December
5, 2009)
During the recent health insurance debate more
than one politician or pundit has made note of the contentment most senior
citizens have with regard to Medicare benefits. That may be true, but
before we get too happy about it we should remember that Medicare is
bankrupting the country. This is no exaggeration. It is estimated that
a single woman who earns $20,000 dollars per year will get a net benefit of a
quarter million dollars. That is, she will get medical benefits that
cost Medicare $250,000 more than the total of payroll taxes she paid during her
entire working career. If that same woman (or man) is married and has
a stay-at-home spouse, her (his) net benefit will be one-half million dollars
($500,000). Since there are millions of such people who are in Medicare, or
soon will be, common sense tells us that such an imbalance cannot be sustained
(no matter how much we try to "tax the rich"). The truth is, Medicare is a
mismanaged mess, and should not be expanded or replicated. Evidence of the waste
in Medicare is found in the "60 Minutes" story found a little further down on
this page.
The chart, below shows net Medicare benefits for
various people at different income levels and with different familial status. It
is reproduced (with permission) from Democrats and Republicans - Rhetoric and
Reality, by Joseph Fried.
Fried obtained the
benefit estimates from tables created by Economists C. Eugene Steuerle and Adam
Carasso. Notice that, no matter what the income level, everyone gets a net
benefit (ranging from a low of $142,000 to a high of $525,000). If
everyone is a Medicare "winner," so to speak, who is going to pay the tab?

The old "Miami Vice" TV show focused on the Florida cocaine
trade:
It should have
focused on Medicare.
Medicare is the government insurance program that
provides health care to 46 million elderly and disabled Americans but it also
provides criminals with a steady stream of illicit income. In fact,
Medicare fraud, estimated to be about
$60 billion per year, may now be one of
the most profitable crimes in America.
Recently, "60 Minutes" ran a story that will raise your blood pressure and raise
troubling questions about our government's ability to manage a medical
bureaucracy. It was a timely story, given the fact that, in the current debate
over health insurance reform, many cite Medicare as the model program to
emulate.
FBI Special Agent Brian Waterman told reporter Steve Croft that evidence of
Medicare fraud is found in the thousands of tiny clinics and pharmacies that dot
low-rent strip malls in south Florida. In these clinics and pharmacies you will
find no one - no doctors, nurses, or patients.
Standing outside one of those small, unstaffed businesses, Waterman stated:
"This office number should be manned and answered 24 hours a day. The tiny
medical supply company he referred to billed Medicare almost $2 million in July
and a half million dollars while 60 Minutes was there in August. However, 60
Minutes was unable to find anybody inside, and their telephone calls were never
returned.
To read the whole story, click here:
Medicare Fraud: A $60 Billion Crime - 60 Minutes -
CBS News
Trustees report for 2009 shows deterioration in SS and Medicare
(5/13/09)
In a recently-released report, the Social
Security and Medicare Trustees note that the economic recession is
exacerbating the financial difficulties for Social Security and Medicare.
Social Security reserves will be exhausted in 2037 - four years earlier
than previously forecasted. Medicare cash will be exhausted by 2017,
which is two years earlier than previously expected. To bring
Medicare into balance over the next 75 years would require an immediate
cut in outlays of 53 percent, or a tax increase of 134 percent (increasing
the rate from 2.9 to 6.78 percent of payroll). Social Security could
be restored to balance over the next 75 years with an immediate benefits
cut of 13 percent or by increasing the payroll tax rate from 12.4 to 14.4
percent.
Read the Trustees summary report>>.
Read
story in the New York Times>>.
Direct links to:
Plurality of Americans want private option
for Social Security (3/12/09)
By 46 to 38 percent, Americans believe workers should be allowed to
opt out of Social Security to provide for their own retirement planning,
according to a recent
Rasmussen Reports national telephone survey.
A majority of voters also agree with President Obama's proposal for
workers to pay Social Security taxes on more of the income they earn each
year. Sixty percent (60%) say people should pay Social Security taxes on all
or most of their annual income. Twenty-nine percent (29%) disagree, and 11%
are undecided. Sixty-two percent (62%) of voters also say people who pay more
in Social Security taxes should receive more in retirement benefits when they
retire. Twenty-two percent (22%) are against that idea, with 16% undecided.
Currently, a worker pays Social Security withholding tax equal to
6.2% of his or her gross wages, up to but not exceeding $102,000 per year. The
same 6.2% tax is imposed on employers. As part of his plan for shoring up
Social Security, Obama has proposed levying the 6.2% tax on wages of $250,000
and above but not on earnings between $102,000 and $250,000. [Note:
Under current law, the benefit payment rate on wages over $54,000 per year is
only a small fraction of the benefit rate for lower wages. In other
words, there is already a large transfer of wealth from higher-earning workers
to lower-earning workers.]
The survey results are from a national telephone survey of 1,000
Likely Voters conducted by Rasmussen Reports on December 21, 2008. The margin
of sampling error for the survey is +/- 3 percentage points with a 95% level
of confidence.
SS Disability
claims soar due to recession (4/19/09)
Job layoffs are leading to increased
applications for disability benefits, and the Social Security system is
straining under the paperwork.
Read on
MercuryNews.com.
Democrats resist
President Obama on Social Security (2/22/09)
The
New
York Times reports that Democrats are resisting President Obama's call
for a bipartisan panel to study Social Security reform. Some liberal
Democrats say they will resist plans to cut benefits, and that Obama's
"political capital" would be better spent on health care and other issues.
Who earns what?
Who pays the taxes? (11/11/08)
According to recently-released IRS data, the
highest earning 1% of of Americans made about 22% of all 2006 income (reported on tax
returns) and paid about 40% of all 2006 federal income tax. Americans with
earnings in the lower 50% made about 12.5% of all reportable income and paid
about 3% of federal income taxes. Keep in mind that welfare distributions
(including food stamps and the Earned Income Tax Credit) were not counted in this
analysis, and would substantially increase the percentage of income for people
with earnings in the "lower 50%."
Read in Kiplinger's>>
INTERESTING NOTE: During the recent U.S.
Presidential election it was claimed that taxpayers with relatively high
earnings "got a break" during the 8 years of the Bush Administration.
However, it should be noted that the percentage of 2006 taxes paid by the upper
1% of earners (40%) was greater than the percentage paid by the upper 1% during
2000 - the last year of the Clinton administration. (They paid about 37.5%.)
In fact, in 2006 the upper 1% of earners paid more than the entire lower 95%
of earners. A great analysis of these tax data, and the trends since 1980,
are found on "Carpe
Diem," the blog of Dr. Mark J. Perry, Professor of economics and finance at
the University of Michigan.
Who is
responsible for the crisis on Wall Street? (10/2/08)
We all know that Wall Street "greed" is
responsible for the recent credit crisis. But, the federal
government is also culpable. Specifically:
-
The Federal Reserve Bank Chairman, Alan
Greenspan, kept interest rates too low after the 911 attack. This
overheated the housing market, and encouraged institutional investors to
park their assets in the now infamous "mortgage-backed securities" (MSBs).
MSBs offered higher interest rates, and seemed safe, but were not because
they were laced with subprime mortgages (risky loans to
marginally-qualified home
buyers). When housing prices declined and these subprime mortgages
went into foreclosure, the market for MSBs collapsed.
-
Virtually all Congressional Democrats (and
some Republicans) fought against regulatory reform of Fannie Mae
and Freddie Mac. These quasi-private entities had a large role in the rapid growth of the subprime mortgage market.
Fannie and Freddie encouraged the expansion of lending in poor and
middle-class
neighborhoods, at the expense of prudent lending practices.
Irresponsible private lenders eagerly followed suit, and further expanded
subprime lending.
-
The Bush Administration's Securities and
Exchange Commission (SEC) was lax in regulating Wall Street lending and
investment practices. SEC should have warned that many of the MSBs
were laced with risky subprime loans, and were not suitable for the
investors who bought them. And, SEC should have been more rigorous
in enforcing the capital requirements of the investment banks.
An excellent overview of the crisis and its
causes has been published on reasononline. See "The
Roots of the Crisis," by Michael Flynn, Director of Government Affairs
for the Reason Foundation.
Where does Barack Obama
stand on Social Security? (7/3/08)
Barack Obama has
stated that he opposes a change to benefits, opposes a change in
retirement age, and opposes allowing workers to opt for Private Retirement
Accounts. His solution to the financial problems of the system is to
tax individuals with income above the current cap of $102,000.
Apparently, these people will pay additional tax without getting
additional benefits, or without getting full additional benefits. (This
detail is not clear.) To read Senator Obama's plan
click here>>.
Fake
janitors skim $2.2 billion from SS trust fund?!
|
Investigations
by Joe Fried and the PPTO
lead to Inspector General finding of $2.2 billion in unauthorized Social Security
payments! For full story
click here>>
(Updated 1/6/09) |
Other
Important Issues
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A Conversation on Strengthening Social
Security
with
- President George W. Bush -
-
Cedar
Rapids, Iowa, March 30, 2005 -
PPTO Director Joe Fried
participated in an informative "Conversation on Strengthening Social Security,"
held on March 30, 2005 in Cedar Rapids, Iowa. The program,
which was hosted by Des Moines' Newsradio1040
radio host, Jan Mickelson, included many topics related to Social
Security, and involved the following participants: President
Bush, Senator Charles Grassley, former Congressman J.C. Watts, and American Spectator
contributor
David Hogberg. Audio clips of each speaker are available at
this link>>. |
----- For many more
Social Security issues --->
click here>> -----
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What
do you think?
(Where
visitors to our Web site express their opinions)
The federal government confuses debt
and revenue
February 16,
2009
A frequent
contributor, Jon Hall, has written a thought-provoking piece for the
American Thinker. Jon notes that off-budget surpluses are
reported inconsistently, and in a misleading manner::
With the
"unified budget", off-budget surpluses are counted as an asset
when reporting deficits but as liability when reporting the
accrued deficits, the national debt. In other words, Congressmen
like Spratt [Rep. John Spratt (D-SC)] can have it both
ways: When it suits them a dollar is revenue, and when it
doesn't suit them it is debt. The "unified budge" makes the
deficit look better than it is while
simultaneously making the national debt look worse
than it is.
Jon also
questions the usefulness of long-term budget projections:
Projections of future
surpluses or deficits are seldom reliable. The projections at the
end of the Clinton years didn't take into account the 9/11 attacks,
the dot-com meltdown, the mortgage mess, etc. Such projections are
purely political.
We share
Jon's concern. The accounting methods used by the federal
government are not sound. For example, the Government uses
"cash-basis" accounting rather than "accrual-basis" accounting,
which is required for Generally Accepted Accounting Principles (GAAP).
Essentially, cash basis accounting means you report income when
received and expense when paid. On the other hand, accrual
basis accounting means you report income when receivable and
expense when owed. To see the dramatic difference
between the two methods, consider the transition period between the
Clinton and Bush administrations. The stock market started to
collapsed in March, 2000 - ten months before President Clinton left
office. By the time President Bush took over (1/20/01), the
government already had an enormous accrued liability for capital
losses that would be claimed 3 months later, on April 15th, 2001.
However, none of the accrued liability was reported by the
government, and it did not reduce the so-called surplus of Clinton's
final year. Had GAAP been used, there may have been no surplus
at all. Indeed, most of the Clinton surpluses of the mid-1990s were
simply the revenue the government collected on NASDAQ stock paper
profits: profits that eventually disappeared, causing
taxpayers to file for refunds during the Bush term.
Why
Social Security needs a private investment option
January 20,
2009
Paul
McWilliams contacted us to express his views on Social Security.
He gives a great analogy pertaining to the lack of a real "trust
fund."
"Let’s say
you hired an investment advisor to plan your retirement and every
year you handed him thousands of dollars feeling secure it would be
there when you needed it. However, rather than investing your money
he uses it to finance his wild lifestyle and stuffs your retirement
account with IOU’s he forges your name on that are actually debts
from you to you. Would you be mad? Would he go to jail (if you
didn’t catch him first)? Well, that is exactly what the U.S.
Government does with your Social Security money; in the private
sector we call this theft, but for our government it’s business as
usual."
The
solution, according to Mr. McWilliams, is a gradual move towards
safe, private investment options. Read more of his views
here.
Social
Security is worse than a Ponzi scheme
January 20,
2009
Jon Hall
points out that, in some respects, Social Security is worse than a Ponzi scheme:
"Whereas a
Ponzi, like Mr. Madoff’s hedge fund, must at least make some
investments – if for no other reason than to escape notice from the
Securities and Exchange Commission – the Social Security
Administration invests none of its surplus. Yes, Social Security
does have a so-called
trust fund, said to contain more than $2 Trillion. But the
treasuries in the “trust fund” differ from “regular” treasuries in
that they are not marketable; they’re IOUs. In reality, there is no
Social Security trust fund – the government spent the surplus."
Mr. Hall
notes that we should not assume that the U.S. will be able to meet
these obligations, given the many other needs requiring attention.
And, he worries about the impact of the unfunded SS opbligation on
the value of the dollar: "[E]ven if Social Security
obligations are met, the question isn’t just whether Social Security
will be there for you, but whether the good ole U.S. dollar will
still be worth anything."
Read the Jon
Hall's entire article on his blog at
http://ultracon-opinion.blogspot.com/2009/01/social-security.html.
Bernard
Madoff to work for SSA?
January 6,
2009
Dear Mr. Fried,
Rather than wasting
taxpayer money to incarcerate Bernard Madoff (the man who stole $50
billion) I think we should consider appointing him to be
commissioner of the SSA. After all, he is an expert on using
the Ponzi scheme to rip off people.
Jack, Detroit
SS
Disability fraud irks visitor*
January 6,
2009
To the PPTO:
Dear Sir,
I read the article
concerning Social Security Disability Fraud online at
(http://www.socialsecuritywaste.org/the_disability_crisis.htm)
and wish to let you know that I have a person in my neighborhood
that I believe is committing disability fraud. If you wish to view
videos showing what this person can really do yet claiming to have a
spinal injury you can view the videos on YouTube under the id of
XXX. I have tried to inform SSI and other organizations of this
but never get any responses. I have even gone down to the local SSI
office and given a CD containing many videos and they had said they
would forward it to NJ to the investigations dept. Still nothing is
being done. It seems that Youtube is the only way to get anyone's
attention....
Please review the videos completely and see for yourself just how
disabled this guy is not. Why should the taxpayers be paying for
this? The guy even has a handicap placard for himself to place in
his vehicle yet he can run, jump, carry 4x8 sheets of plywood, ride
motorcycles-atv's- dirtbikes- snowmobiles, and do just about
anything better than a non disabled person can do.
Regards, XXX
*This letter is typical
of the kind of letters PPTO has received from concerned taxpayers
about SS fraud. This letter has been edited to preserve
anonymity and minimize space requirements.
When
will SSA respond to your Freedom of Info. request?
December 16, 2008
Dear PPTO:
On your "Texas Teacher
Scam" page you said that PPTO had requested info. to determine what
(if anything) SSA was going to do about the $2 billion Social
Security rip-off, but I don't see anything. Is that
information still going to be posted?
[Yes, we are still
pursuing the request, but SSA seems to be dragging its heels.
This is probably due to the fact that SSA has done very little to
rectify the problem, and does not want to tell that to the public.
Rest assured that we will continue to pursue this and will use all
available administrative and legal means. - Joe Fried, Dir., PPTO]
Ticket
to work is a failure
October 29,
2008
The "Ticket
to Work" program was created by an act of Congress in 1999, and was
supposed to encourage disabled workers to seek rehabilitation
services that could get them back into productive jobs.
However, the results seem to be dismal. A visitor to the Web
site put it this way:
I am one of the lucky
ones who got the "Ticket to Work" information packet, swore
under my breathe for quite some time, then threw it in the
trash. Why don't they have people who are ON SS Disability on
these committees that decide things so they don't screw up so
badly that all they do is waste billions of dollars (which I am
sure went to friends & acquaintances) which could have been pay
checks for DISABLED PERSONS instead.
I would love to see a
true and accurate accounting of this program. How many people
went back to work and remained part of the employed. How much
was spent on the agencies that administrated the training,
etc. (How many were related to Representatives)
This harsh assessment
prompted us to seek information on the status of the program.
The
last published evaluation (in 2007) reviewed the program's
progress as of December 2004 - and it was dismal. At that
point only 1.4% of eligible disabled beneficiaries were
participating.
Now, the SSA is
implementing
new
regulations designed to improve the system. We remain
dubious.
A
windfall for geezer kids!
September
18, 2008
Some people seem to feel
that "entitlements," such as Social Security, should be
unchangeable, as if cast in stone. Any reduction in benefits
would, in their opinion, violate a sacred commitment made to
beneficiaries. However, we must constantly review entitlement
programs to ensure that they are effective, efficient, fair, and
free of loopholes and give-aways. Recently, a visitor to this
Web site, Lesley Throup, pointed out such a wasteful
loophole.
The minor children of
Social Security beneficiaries can qualify for substantial
monthly benefits until they reach the age of 18. Consider this
example, provided in the October 2008 issue of
Kipplinger Personal Finance: Donald McCarren is 68 years
old and has a daughter who is 5 years old. He recently
learned that, because he is a retiree and Alexa is a minor, she is
entitled to SS benefits of $1068 per month until she reaches the age
of 18. McCarren received a retroactive payment (on behalf of
his daughter) for $40,000, and will receive more than $250,000 by
the time Alexa is 18.
Frankly, we believe that
men in their '60s should not have children if they have to rely on
Social Security to support them. This is a total waste of
money, and an outrage. Congress needs to modernize the Social
Security benefit formula to eliminate such wasteful benefits.
A Quick Fix for America’s Elections
June 17, 2008
By visitor
Jon N. Hall
On
March 12 before the Senate Rules Committee, Missouri Secretary
of State Robin Carnahan
testified on voter fraud and her opposition to photo ID laws. “A dog
has never voted in Missouri, nor has a dead person come from the
grave and voted…I think this shows the system is working,” [1] she
said. Carnahan went on to assure the committee that there are few
election problems and little voter fraud in Missouri. One might
doubt her assurances: What are dogs doing on Missouri voter
registries?
What’s really disheartening about America’s election problems is
that the solution is so very obvious—technology.
Read More on Jon Hall's Blog>>
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