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FOR IMMEDIATE RELEASE
New Book Faults Both Clinton and Bush for Empty Social Security Trust Fund
FROSTPROOF, Fla., December 14, 2007—Presidents Bill Clinton and George W. Bush have spent every dime of the surplus Social Security revenue flowing into the Treasury during their terms in office, according to economist Allen W. Smith, Ph.D. in his new book, *Demystifying Economics: The Book That Makes Economics Accessible to Everyone. Smith points out that the 1983 legislation, which substantially raised Social Security taxes, was designed specifically for the purpose of building up a surplus in the Social Security trust fund in preparation for the staggering new obligations the fund would face when the baby-boom generation begins retiring about 2010. Instead, Smith reports that the government began using the surplus to pay for other government programs as soon as it first appeared in 1983, and it has continued to do so ever since.
Although the first President Bush and President Clinton both violated the intent of the law in using Social Security revenue for non-Social Security purposes, Smith makes a distinction between their actions and those of President George W. Bush. According to Smith, both George W. Bush and Al Gore entered into a new covenant with the American people when they both emphatically and unconditionally pledged to end the looting of Social Security during the 2000 presidential campaign. Gore promised to put every penny of Social Security revenue into a “Social Security lockbox,” to be used for Social Security alone, and Bush pledged to do the same. Even after becoming President, Smith says that Bush continued to insist that he would not touch the surplus Social Security revenue. In a speech on March 3, 2001, Bush emphatically stated,
“We’re going to keep the promise of Social Security and keep the government from raiding the Social Security surplus.”
Bush never rescinded that pledge to the American people, Smith claims, but he has consciously and systematically used the Social Security surplus as a giant slush fund to help pay for his huge tax cuts for the rich and the war in Iraq, among other things. By early 2007, the amount of money looted from the Social Security trust fund by the Bush administration had surpassed the $1 trillion mark, and Bush continued to loot, and spend, Social Security money at the rate of $500 million per day.
According to Smith, during his failed attempt to push through his Social Security privatization plan in 2005, Bush’s frustration over his inability to convince the American people that Social Security was in deep trouble led him to openly admit the role of his administration in looting Social Security. On Thursday, April 28, 2005, during a nationally televised news conference, President Bush said,
“Our system is called pay as you go. You pay into the system through your payroll taxes and the government spends it. It spends the money on current retirees and with the money left over, it funds other programs. And all that’s left behind is file cabinets full of IOUs.”
*Demystifying Economics, The Book That Makes Economics Accessible to Everyone, Expanded Third Edition, Allen W. Smith, Ph.D.; Ironwood Publications: LCCN 2007934821; ISBN: 978-0-9770851-2-5; Pages: 288, 6x9; $26.95; Publication date: January 2008
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ABOUT THE AUTHOR: Allen W. Smith is Professor of Economics Emeritus, Eastern Illinois University. He is the author of numerous other books including, The Looting of Social Security: How the Government is Draining America’s Retirement Account; The Alleged Budget Surplus, Social Security, and Voodoo Economics; and Understanding Economics. He holds a Ph.D. in economics from Indiana University.