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The Money Is Gone!
Security does not have $2.7 trillion stashed away for paying benefits, as so many people believe.
Social Security cannot pay benefits for another 20 years, as is often claimed.
Social Security does not have enough money to pay full benefits, even
for 2014, without borrowing money from China or another of our creditors.
The Social Security trust fund is
empty. The only thing it holds is non-marketable government IOUs which cannot be used to pay benefits, and cannot be
converted into cash.
“There are no stocks or bonds or real estate in the trust fund. It
has nothing of real value to draw down.”—David Walker, Comptroller
General of GAO, January 21, 2005
“There is no trust fund, just IOUs that I saw firsthand that future generations
will pay—will pay for either in higher taxes, or reduced benefits, or cuts to other critical government programs.”.—President George W. Bush, Speech at West Virginia University at Parkersburg, April 5, 2005
Neither the redemption of trust fund bonds, nor interest paid on those bonds, provides any
new net income to the Treasury, which must finance redemptions and interest payments through some combination of increased
taxation, reductions in other government spending or additional borrowing from the public."--Summary of the 2009 Social Security Trustees Report
“Congresses under both Republican and Democrat control, both Republican and Democrat presidents,
have stolen money from social security and spent it. The money’s gone. It’s been used for another
purpose.”—Senator Tom Coburn (OK) Senate speech, March 16, 2011
at what's driving the problem. 10,000 baby-boomers like me retiring, every single day. 70,000 this week. 3.5 million this
year. And it's not like there's money in Social Security or Medicare. The government, over the last 30 years, have spent it
all.”—Speaker of the House, John Boehner, on ABC’s
This Week , October 6, 2013
How It All Started
The Social Security Amendments of 1983 laid the foundation for 30 years of government embezzlement of
Social Security funds. When President Reagan signed that legislation into law, with great fanfare, on April 20, 1983,
his comments gave the impression that he thought it was a proud day for America.
But, instead of being a proud day for America, it turned out to be a day
of shame for the United States. The money was used to pay for wars, tax cuts for the rich, and other government
programs. None of the surplus revenue went to Social Security.
From the very beginning, Reagan and his advisors had no intention of saving and investing the new revenue
for the retirement of the baby boomers. They needed additional general tax revenue, and an increase in the payroll tax
would be much easier to enact than higher income taxes. Also, the potential to get vast amounts of revenue was much
greater with a payroll tax increase than from an income tax increase. The baby boomers, the largest generation of Americans
who ever lived, were already making large contributions to the Social Security fund. Like all previous generations,
prior to 1983, the boomers were being required to pay the full cost of benefits paid to the previous generation. But,
the proposed new legislation would hit the boomers with a double whammy. In addition to paying for their parents’
benefits, the new law would require the baby boomers to also pay enough additional taxes to prepay the cost of their own benefits.
This would generate a potential gold mine of surplus revenue that could be tapped and used for other purposes.
The 1983 legislation was sold to the public, and to Congress, as a long-term
fix for Social Security. With the help of Alan Greenspan, Reagan was a super salesman, who could have sold almost anything
to the public—even a scam. And that’s exactly what he was selling. Reagan intended to use the surplus
Social Security revenue to replace revenue lost because of his unaffordable income tax cuts. Instead of being set aside
for the retirement of the baby boomers, as was the intent of the legislation, the extra Social Security revenue was deposited
directly into the general fund just like income tax revenue.
None of the $2.7 trillion in additional Social Security revenue was ever saved or invested
in anything. The actual surplus money was replaced with non-marketable government IOUs, which cannot be converted into
cash or used to pay Social Security benefits.
would have been bad enough if only Reagan had looted Social Security money. But George H.W. Bush, Bill Clinton, and
George W. Bush all followed in Reagan’s footsteps and spent all of the Social Security surplus revenue for non-Social
Security purposes, just like Reagan.
LONG STRUGGLE TO EXPOSE THE GREAT SOCIAL SECURITY HEIST
On September 27, 2000, Dr. Allen W. Smith appeared on the CNN afternoon news to discuss his newly
published book, The Alleged Budget Surplus, Social Security and Voodoo Economics. This marked the beginning
of of Smith's thirteen-year-long campaign to alert the public to the fact that the government was taking money from Social
Security, depositing it into the general fund, and then using the revenue for other purposes, as if it were general revenue
from the income tax. The money taken from Social Security was replaced with non-marketable government IOUs, that
could not be used to pay benefits, and could not be sold,or in any other way, converted to cash. Smith thought
that once he reported that the government was embezzling Social Security money and spending it for other things, there
would be a public outcry, and the looting would come to an end. But that did not happen. The government continued to
keep the big dirty secret from the public.
25, 2004, Alan Greenspan launched a verbal bombshell which set off anger, and some degree of panic, throughout the nation.
He called for cutting Social Security benefits for future retirees because, in his words, "We are over committed
at this stage. It is important that we tell the people who are about to retire what it is they will have."
Dr. Smith was furious over Greenspan's double-crossing of the baby boomers. Greenspan had helped President Reagan push the
payroll tax hike of 1983 through Congress, which was supposed to provide enough surplus revenue to fully fund the retirement
of the baby boomers. Twenty-one years later, after two decades of government embezzlement of Social
Security funds, Greenspan was pretending that the surplus revenue had never existed and advocating cutting Social
Security benefits to future retirees who had already prepaid the cost of their own benefits. The following day, Dr. Smith
was one of two invited guests to respond to Greenspan on the CNBC morning news. That interview was recorded and is the
second video below.
A month later, on March 22,
2004, Smith was interviewed by "The Dollans" on CNNfn. This interview makes up the third video in the
series below. By viewing the videos, you will see that Allen W. Smith was making the same arguments in 2004 as he made
in his 2000 interview on CNN. Ten years later, as we enter 2014, Dr. Smith continues his effort to expose the great
Social Security theft. But the Social Security program is in much deeper trouble today than ever before. The last
surplus year was 2009. In 2010, Social Security transitioned from 30 years of annual surpluses to permanent deficits. The
cost of paying full benefits in 2010 exceeded Social Security revenue by $49 billion. The government had to borrow $49
billion from China, or one of our other creditors, in order to pay full benefits in 2010. The deficits will become larger
and larger in the years ahead, meaning that unless their are benefit cuts or tax increases, the government will have to borrow
more and more for Social Security. This is not possible without large increases in the debt ceiling, which seems unlikely
in the current political climate. The only thing Social Security has is its annual tax revenue. It does
not have a bunch of money stashed away that it can draw down. All of the $2.7 trillion that is alleged to be in the
trust fund is gone. It has been spent for other purposes. Yet. government officials and the AARP continue
to tell the public that Social Security has enough money to pay benefits for 20 more years. These statements
are deliberate lies to try to keep the big dirty secret from becoming public knowledge. The government does not even have
enough money to pay full benefits in 2014, without borrowing money.
View video of three Social Security interviews with Dr. Allen W. Smith on national TV
Mainstream Media Outlets Have Been Reluctant to Report
a Story Which the Government has Kept Secret from the Public for 30 Years
I have continued my relentless campaign to expose the Social Security theft to this day, using any media outlets
that were available. The looting of the Social Security surplus is sometimes reported on editorial pages, but it never
makes it into the mainstream news. For that to happen, the President of the United States, or perhaps the Secretary
of the Treasury, would have to hold a press conference, or issue a press release, stating specifically that all the Social
Security surplus had been spent for other purposes, leaving the trust fund without any current liquid assets.
Although specific members of Congress have stated publicly that Social Security has no reserve money, these statements
are never widely reported by the mainstream media. On March 16, 2011, Senator Tom Coburn (R-OK) made the following statement
during a Senate speech: "Congresses under both Republican and Democratic control have stolen money from Social
Security and spent it. The money's gone. It's been used for another purpose." On October 6, 2013, House speaker
John Boehner said on ABC television, "It's not like there is money in Social Security...The government, over the last
30 years has spent it all." Such statements would have been headline news during the Watergate era, when reporters
engaged in active investigative reporting. But there is little investigative reporting today. When Dan Rather,
a highly respected Journalist, was fired because he reported a story that the White House did not want reported, a powerful
message was sent to every journalist in America. If they valued job security, they had better be careful not to report
anything the government did not want reported. Talk radio is still an area where
almost anything can be discussed, and I have done more than 200 radio interviews. I have also appeared on a few local TV stations
where daring investigative reporters try to cover the news not being covered by the mainstream media.
On June 2, 2011, I appeared on WTSP, Channel 10, in Tampa. Investigative reporter Mike Deeson interviewed
me and also showed a clip from Senator Coburn's statement on the stealing of Social Security money. It was a daring
report of the true status of Social Security, and Mike tried to get it carried by as many other stations as possible. Please
click on the link below to view the Tampa video.