President George W. Bush made a shocking assertion back in 2005 when he was pushing to privatize Social Security. “A lot of people in America think there is a trust,” he said, “that we take your money in payroll taxes and then we hold it for you and then when you retire, we give it back to you. But that’s not the way it works. There is no trust fund — just IOUs ….”

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(11) comments

Thomas Vern

Past govenor's and politicians in Concord did the same thing with the NH State Retirement system's investment returns... now that eveyone feels it is too much of a liability to fund, this story on SS should give everyone a better perspective of what those employees have been saying about the past.

IOU's never get paid back by government, city and town reprieves from paying the employer matching contributions in the pension system will certainly create short falls and the one who suffers the most is the person who has been paying into the state or SS because they are forced to. Shame on the mis-management of $.

hsavage

So as the democrats continue lying about Social Security, it continues to erode....

allenwsmithphd


Consider the following words of Senator Harry Reid, from a speech on the Senate floor on October 9, 1990. Senator Reid said:

“The discussion is are we as a country violating a trust by spending Social Security trust fund moneys for some purpose other than for which they they were intended. The obvious answer is yes.”

Senator Reid then pointed to a large poster being held above Senator Moynihan with the letters, EMBEZZLEMENT printed in large bright red letters and said,

“I think that is a very good illustration of what I was talking about, embezzlement, thievery. Because that, Mr. President, is what we are talking about here…on that chart in emblazoned red letters is what has been taking place here, embezzlement. During the period of growth we have had during the past 10 years, the growth has been from two sources. One, a large credit card with no limits on it, and, two, we have been stealing money from the Social Security recipients of this country.”

I was a strong admirer of Senator Reid in 1990, when he was telling the truth about the Social Security trust fund and trying to end the looting. But he abandoned his cause when he got into a leadership position. Today he is knowingly, and deliberately, lying to the American people about Social Security.

Senator Tom Coburn hit the nail squarely on the head when he said on March 16,

“Congresses under both Republican and Democrat control, both Republican and Democrat presidents, presidencies have stolen money from social security and spent it. The money’s gone. It’s been used for another purpose.”

I am a lifelong progressive Democrat, and I usually do not have much good to say about Republican politicians. But Senator Coburn is a different breed of Republican. He is a medical doctor with strong convictions, and he has pledged not to seek another term in the senate. So he is free to tell it like it is, and try to do what is best for the nation and its citizens.

Allen W. Smith, Ph.D.
Professor of Economics, Emeritus
Eastern Illinois University
www.thebiglie.net

allenwsmithphd

I have dedicated the past ten years of my life to trying to alert the pubic to the fact that the government has been "borrowing," "embezzling" "or stealing"--whichever word you prefer--money from the Social Security fund, for the past 25 years, and using it to finance tax cuts, wars, and other government programs. I first stumbled onto the great Social Security scam more than ten years ago while doing research for my first Social Security book, "The Alleged Budget Surplus, Social Security, and Voodoo Economics." On September 27, 2000, I appeared on CNN with anchor Lou Waters to discuss the newly published book. I tried my best to convince Waters that Social Security money was being spent for non-Social Security purposes, but he seemed more amused than interested in what I was saying, and he finally asked me, "Are you a voice crying in the wilderness?" As things turned out, I was a voice crying in the wilderness in 2000, and I continue to be such a voice a decade, and three books, later. Every penny of the $2.6 trillion in excess Social Security revenue, generated by the 1983 payroll tax hike, has been spent on whatever politicians chose to spend it on.

When my book, "The Looting of Social Security," was published in early 2004, I thought I was about to expose the Social Security scam and end the looting. On February 26, 2004, I was one of two invited guests to appear on the CNBC morning news to respond to Fed Chairman Alan Greenspan's call for Social Security benefit cuts the previous day. I used the occasion to hold my new book in front of the camera and say, "Alan Greenspan should be ashamed of himself for what he is not telling the American people." By doing so, I apparently drove the final nail into the coffin of my new book. Several weeks later, the book mysteriously disappeared from bookstores nationwide, and was listed as "unavailable" by Amazon.com. I tried to get my publisher to revert the rights to the book back to me so that I could publish it elsewhere, but the publisher refused. So I was effectively muzzled during the period of the Bush privatization campaign.

Early reviews had hinted at just how explosive the revelations of the books would be.

The Boston Globe reported, “If you…have the stomach for a truly demoralizing read…you might wish to take up , ‘The Looting of Social Security,’ by Allen W. Smith…With dismal clarity, Smith lays out the step-by-step history of how a national pension plan was transformed into an outright shakedown of working people…”

ALA Booklist wrote, “Smith…has written a scathing account of massive fraud on the part of our nation’s leaders, who have plundered every cent of the Social Security Trust Fund surplus that was specifically earmarked for the retirement of baby boomers.”

Someone, some group, or some government agency decided that the public should not be allowed to read the book.

Of course, I had no way of knowing that Greenspan’s call for benefit cuts was the opening salvo in a major organized effort to privatize Social Security. Bush’s campaign to partially privatize Social Security had not yet been publicly announced, but it was in the planning stage. Those behind the privatization effort wanted to frame the Social Security debate on their own terms. My book would have at least been a distraction, and it might have been an outright threat to the success of the Bush privatization campaign. I’m sure that Alan Greenspan saw at least a video of the challenge I made to him during that CNBC appearance. I also think he would have recognized how “inconvenient” the release of my book would be for the privatization campaign. There is no way that I can know for sure whether Greenspan or the Bush Administration played any role in the removal of my book from the market, but neither can I rule them out as possible suspects.

Allen W. Smith, Ph.D. www.thebiglie.net

NH_Native

Unfortunately, it's the crime of the century - right before our eyes.

Pure 'Chicago style' economics and "the dole" mentality. I believe this adminstration want's to break the spine of America, redistribute the middle classes wealth, and basically screw all of those who were taught that working hard and saving money for your future was the right thing to do.

Don Levit

Allen:
Do you have any idea where in the SS legislation it allowed for the Treasury to borrow from the SS trust fund.
To my knowledge, this was the first time government was able to fund its expenses through borrowing from one agency from another.
I felt the same way about SS after reading various governmental documents.
I became so outraged, that I continued my research, and kept all the excerpts and links.
I have gotten into several "heated" discussions, even with very knowledgeable people, who still cannot refute these excerpts, but still cling to the idea that the trust fund is fully funded.
One of them is Bruce Webb at the Angry Bear blog, who became so angry with me, he kicked me off the blog!
It was not for foul words; rather, it was for repeating the facts, backed by governmental links, which he could not take anymore!

From the trust fund perspective, it is fully funded.
The trust fund perspective says that Part D is fully funded, even though 75% is funded by the government out of its current budget and 25% by the participants.
However, from the budget perspective, which is more broad and more objective, it is the most expensive unfunded liability in the Medicare program!
Thomas:
I was not aware of what was happening with the pension fund in NH.
I will tell you, though, that the federal employees' retirement trust funds have been treated similarly to that of SS.
And, these liabilities, of over $5 trillion, are listed on the balance sheet.
I can provide links and excerpts for all those who are interested.
Please specify which statements you want supported.
Don Levit

allenwsmithphd

Don,

Payroll tax revenue has always been a dedicated tax with revenue from it supposed to go exclusively for the payment of Social Security benefits. In 1990, because the government was looting Social Security, Senator Ernest Hollings of SC introduced even stronger legislation that would prohibit the comingling of Social Security funds with other revenue. That legislation became a part of the Budget Enforcement Act of 1990 which made it illegal to, in any way, count Social Security as part of general revenue. But the government just ignored and violated the new law. Presidents and Congresses have been knowingly and intentionally violating that federal law for the past 21 years.


You can't put too much reliance on even the offical government websites, such as that of the Social Security Administration. For years, the site has included a statement to the effect that "excess revenue, not needed to pay current benefits in any given year, is invested in U.S. Treasury Securities. Not a single dollar of surplus revenue generated by the 1983 payroll tax hike has ever been saved. Thus, none of it has been invested in Treasury Securities or anything else. It has all been spent as general revenue. Anyone can verify for themselves that none of the Social Security money was saved or invested by simply examining the federal budgets for the past 25 years. When you add up the total government spending, including the payment of Social Security benefits, and compare that number with the total federal revenue from all sources, including the payroll tax revenue, you will find that the government has spent a great deal more than it has taken in from revenue. The government spent all of its general revenue plus all of the Social Security surplus revenue, and still had to borrow massive additional amounts just to pay its bills.

Money can be spent or it can be saved. If it is saved, it can also be invested, but money can only be spent one time. Once it is spent, there is nothing left to invest. Since all of the surplus Social Security revenue was spent for wars and other government programs, and none of it was saved, there was no money to invest in anything.

Every member of Congress, and every government official, knows about the great Social Security theft. But very few members of the public know about it. This is by design. The government does not want the theft to become public knowledge. Both Republicans and Democrats are equally guilty of looting Social Security, and if the whole truth ever comes out, many long public careers will probably be destroyed. The government does not want the Social Security theft reported, and most of the mainstream media honor that wish. Most journalists remember what happened to Dan Rather when he reported a story that the government did not want reported.

For more than a decade, I have struggled to inform the public that the Social Security money was being spent for non Social Security purposes. On March 16 of this year Senator Tom Coburn of Oklahoma let the cat out of the bag during a speech on the Senate floor. He said, “Congresses under both Republican and Democrat control, both Republican and Democrat presidents, presidencies have stolen money from social security and spent it. The money’s gone. It’s been used for another purpose.”

Senator Coburn angered both Republicans and Democrats with that statement of truth, and he continues to repeat the statement over and over. I have not heard a single Senator try to refute what Coburn said. It is pretty hard to refute the truth.

Allen W. Smith, Ph.D.
ironwoodas@aol.com
www.thebiglie.net
1-800-840-6812

Don Levit

Allen:
Every word you said is true.
I have governmental agency excerpts, including from the Social Securitry Administarion (SSA) to back up everything you said.
Are you in any need of excerpts and links, or are you well supplied?
It helps to frame the discussion between person X and the IRS, Treasury, GAO, CBO, and the SSA, etc. rather than a debate between you and I.
There is no such animal as dedicated tax revenue, other than the taxes that go to pay present benefits.
Dedicated tax revenue and surplus FICA dollars don't mix, because those surplus dollars ARE taxes, and, legally, can be used to provide for the general welfare. That's what taxes do. In fact, SS could pay benefits without FICA taxes.
Benefits are actually based on earnings history, and not taxes paid in.
Benefits could theoretically be provided even if we did away with FICA taxes.
Again, I have reputable government links to support my statements.
Don Levit

allenwsmithphd

Don,

Please email me all links and other documentation that you have at ironwoodas@aol.com. I have been at this for more than ten years, and I have a lot of information, but you cannot have too much documentation when you are trying to expose a scam that the government does not want exposed.

Allen W. Smith
ironwoodas@aol.com
1-800-840-6812

LittleStream

So amazing that no where in the article does it say Congress stole or mismanaged these funds. This fund actually needs to be fixed so Congress can't pilfer the funds when the mood strikes.[angry]

RichinOP

"It would be nice if we could drag the past five presidents and all members of Congress since 1983 into court and squeeze the $2.6 trillion out of them. But we can’t. We elected them, and they did all the borrowing for us." .... There's a lot of Democrat bashing going on here, but by my count 3 of the last 5 presidents have been Reagan, Bush and Bush Jr. [wink]

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