Government Owes $2.7 Trillion to Social Security
Allen W. Smith, Ph.D.
In his explosive new book, THE IMPENDING SOCIAL SECURITY CRISIS, noted economist and Social Security writer, Allen W. Smith drops a real bombshell. The government has embezzled all surplus Social Security revenue, generated by the 1983 payroll tax hike, and spent the money on wars and other government programs. None of the money was saved or invested in anything.
The only reason the government has been able to keep the public from finding out about "the great Social Security theft"is because the AARP and the NCPSSM have cooperated with the Social Security Administration in their official talking [points about Social Security. The AARP has the following statement posted on its website: "Social Security will be able to pay 100 percent of benefits for the next 20 years." The NCPSSM has this statement on on its website: "Social Security is projected to deliver full guaranteed benefits until at least 2033." But these statements are not true, and the leadership of these two organizations know that they are deliberately misleading both their member and the public with these false statements. Social Security is today cash broke. Its tax revenue for 2010 was 49 billion less than the cost of paying full benefits in 2010. And the gap between Social Security revenue and the cost of paying full benefits will become larger and largerin the years ahead.
The government IOUsin the trust fund are not like the marketable U.S. Treasury bonds held by China and America's other creditors. Those marketable bonds can be converted into cash at any time by selling them in the open market. The IOUsin the trust fund are like ahandwritten note that a bank robber might leave behind in the empty vault, stating how much money he had stolen. The note tells the bank how much moneyis missing, but it won't help the bank getthe money back. Similarly, the IOUs in the trust fund are a record of howmuch Social Security money was taken and spent on other programs. Butthe IOUs are not marketable. They could not be sold to anyone, even for a penny on the dollar. And the interest income,the SSA claims the government is paying, is not cash interest. It is in the form of more of the same worthless IOUs that the trust fund already holds.
Allen W. Smith, Ph.D. is professor of economics emeritus at Eastern Illinois University. He is the author of eight books, and he has devoted the ast 13 years to a relentless campaign to expose the ruth about Social Security
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