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News Releases
CBO Report Ignores Government Looting of Social Security Trust Fund
WINTER HAVEN, Fla., June 15 /PRNewswire/ -- The new CBO Report on the Social Security outlook totally
ignores the fact that the federal government has looted all of the reserves that are supposed to be in the Social Security trust
fund, says economist Allen W. Smith, Ph.D., author of "The Looting of Social Security: How the Government is Draining America's
Retirement Account" (Carroll and Graf 2004). Smith points out that the 1983 Social Security tax increase
was designed to create Social Security surpluses that would be used to build up a reserve with which to fund the retirement
of the baby boomers. That tax increase has generated $1.5 trillion of surplus Social Security revenue, but every
penny of it has been looted by the government and used for other programs, including the funding of George W. Bush's
unaffordable tax cuts. In 2018, according the Trustees Report, (2019 according to the CBO), Social
Security will begin running annual deficits. The plan was to begin dipping into the reserve in the trust fund at
that time to supplement the inadequate Social Security Revenue. But the fund is empty! That is why Alan Greenspan
says Social Security benefits will need to be cut. The news media, and the general public have so far
failed to focus on the most urgent Social Security problem -- the need for the government to immediately halt the practice
of using Social Security money for non-Social Security purposes and to enact legislation that will provide for the repayment of
the $1.5 trillion already looted. By counting the "essentially worthless" government special-issue IOUs in the trust
fund as if they were real assets, the fund appears solvent until 2042 to the Trustees, and until 2052 to the CBO.
But, as things stand now, in just about 15 years there will not be sufficient Social Security revenue to pay full benefits
because of the government looting. The Social Security fund would be able to pay full benefits for approximately
40 more years if the Social Security money had not been looted. However, unless the government stops using Social Security
revenue for funding tax cuts and for other programs, and establishes a plan for gradually repaying the $1.5 trillion
that it has already borrowed/embezzled from the fund, millions of Americans will be cheated out of at least part of their
Social Security benefits. The only way that the government can replace the $1.5 trillion that it has already misappropriated
is to substantially increase taxes or borrow massive additional amounts from the public. It is questionable as to whether
future leaders would take such unpopular actions to replace the funds that were looted by previous leaders.
CONTACT: Blanca Oliviery, Senior Publicist, Avalon Publishing Group, (646) 375-1065; blanca@avalonpub.com, or Allen W. Smith, +1-863-206-4292, or ironwoodas@aol.com
Available Topic Expert(s): For information
on the listed expert(s), click appropriate link. Allen W. Smith, Ph.D. http://www.profnet.com/ud_public.jsp?userid=350721
SOURCE Allen W. Smith Web Site: http://www.ironwoodpublications.com
Idaho River-Guide Musicians Launch Coalition to Save Social Security
WINTER HAVEN, Fla., June 14 /PRNewswire/ -- Jerry Grusell and Dominique Tardif,
who make their living playing music for rafting expeditions in the summer, and mountain retreats in the winter, may seem
unlikely candidates to launch a national movement to "save" Social Security, but that is exactly what they have done.
They are the co-founders of the Citizens Coalition for Social Security Restitution, a nonprofit, nonpartisan, organization
dedicated to stopping the looting of Social Security and seeking restitution of the $1.5 trillion that has already been
looted. Jerry and Dominique were living relaxed, tranquil lives until February of this year, but
a trip to the Barnes and Noble bookstore in Boise changed all that. "I am the kind of book shopper you will find
on hands and knees at Barnes and Noble, searching for just that certain book," Jerry said. "That is the position
that led me to Allen W. Smith's book, 'The Looting of Social Security: How the Government is Draining America's Retirement
Account' (Carroll and Graf, 2004). I ordered a cup of espresso in the Starbuck's section and methodically reviewed
my find. 'This is excellent,' I thought ... all my life I had heard that Social Security was in trouble, that I may
never receive benefits even though I had been paying into this system all my working life. Like most Americans,
I had no idea the system was being 'looted.' Shocked and anxious to read deeper, I finished my coffee and bought the book ...
By the third chapter, I found answers to questions I didn't even know I had. In fact, I was spitting nails with anger."
Jerry and Dominique contacted the author, Dr. Allen W. Smith and asked if he would serve as an advisor if they launched
the Citizens Coalition for Social Security Restitution. Dr. Smith agreed, and the rest is history. The organization
was launched, and it is growing rapidly. Now the Coalition seeks to get as many Americans as possible to visit their
website http://www.restoresocialsecurity.org and join the growing movement.
CONTACT: Blanca Oliviery, Senior Publicist, Avalon
Publishing Group, (646) 375-1065; e-mail:
blanca@avalonpub.com or Allen W. Smith (863) 206-4292;
email: ironwoodas@aol.com
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The Social Security Trust Fund is Empty, Economist Says in New Book

WINTER HAVEN, Fla., May 18 /PRNewswire/ -- Every penny of the $1.5 trillion generated by the 1983 Social Security tax increase
is gone, says Winter Haven-based economist Dr. Allen W. Smith, who says the crime amounts to "the greatest fraud ever perpetuated
on the American people."
Smith, author of the new book, "The Looting of Social Security: How the Government is Draining America's Retirement Account"
(Carroll & Graf, 2004), says taxpayers are ignorant of the crime which began during the last year of the Reagan administration
and has continued under the George H.W. Bush and Bill Clinton administrations and escalated under George W. Bush's watch.
Smith says the government has used the funds earmarked for baby boomers' retirement to fund other projects, including George
W. Bush's tax cuts for the wealthy.
"It's unconscionable to use payroll tax receipts from working-class Americans to fund income tax cuts for the richest Americans,"
Smith says.
Smith has a Ph.D. in economics from Indiana University, Bloomington, and has taught economics at the university level for
30 years. Smith has appeared on CNBC, CNN, and CNN-fn as well as on more than 75 radio programs. Among Smith's previous books
are, "The Alleged Budget Surplus, Social Security & Voodoo Economics," "Demystifying Economics," and "Understanding Inflation
and Unemployment"
Praise for "The Looting of Social Security"
"... presents what is at heart a straightforward grievance: for more than a decade, political leaders from both parties
have used various accounting tricks to shift the Social Security surplus into the general budget, in violation of federal
law, and have lied about the nation's 'financial status.'" -- Publishers Weekly
"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." -- Boston Globe
"... 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." -- Booklist
CONTACT: Blanca Oliviery, Senior Publicist, Avalon Publishing Group, (646) 375-1065; e-mail: blanca@avalonpub.com or Allen
W. Smith (863) 206-4292; email: ironwoodas@aol.com
Website: http://www.ironwoodpublications.com/
THE SOCIAL SECURITY PROBLEM AND SOLUTION
Allen W. Smith, Ph.D.
THE PROBLEM
'The Secret of the Looted Social Security Trust Fund Is Out,' Says Author of 'The Looting of Social Security'
WINTER HAVEN, Fla., March 8 /PRNewswire/ -- The long-kept secret of the empty Social Security trust fund is no
longer a secret, says economist Allen W. Smith who has been trying to alert the public to the trust fund fraud for the past
five years. Smith, the author of "The Looting of Social Security: How The Government Is Draining America's Retirement Account"
(Carroll and Graf 2004), first stumbled onto the fraudulent way Social Security contributions were being handled in early
2000 while doing research for a previous book.
"When I first discovered that the Social Security surplus was being
used just like general fund revenue, I was shocked," Smith said. "I wanted to tell the whole world about it, but nobody would
listen. So I set out to convince Al Gore to take a stand against the looting, hoping it would then become a major campaign
issue in the 2000 presidential campaign." Smith sent advance copies of his forthcoming new book, "The Alleged Budget Surplus,
Social Security, and Voodoo Economics," along with many other research findings to Gore through multiple channels to make
sure that at least some of the material got to him. When Gore announced his Social Security lockbox proposal Smith knew the
message had gotten through. During the campaign, Bush also pledged to put the surplus in a lockbox so Smith thought the looting
was about to end no matter who became the next president.
"But Bush broke his promise and kept right on spending the
Social Security money. He is currently spending approximately $400 million of Social Security money each and every day," Smith
points out.
Until very recently Smith was almost the only person trying to alert the public to the looting and the
empty Social Security trust fund. But suddenly major newspapers and other news media are beginning to cover the story. Smith
says the first major story on the trust fund was Dan Froomkin's "The Amazing Disappearing Trust Fund," in the February
11, Washington Post in which Froomkin reported that President Bush himself was now admitting that all the money in the
trust fund has been spent. He quoted Bush as making the following statement in a Pennsylvania speech the previous day: "Every
dime that goes in from payroll taxes is spent. It's spent on retirees, and if there's excess, its spent on government programs.
The only thing that Social Security has is a pile of IOUs from one part of the government to the next."
In the February
14 issue of Newsweek, Allan Sloan wrote, "The money isn't being saved. Instead, one part of the government, the Treasury,
is writing IOUs to another part, Social Security...The trust fund's irrelevant, folks. It's an accounting entry, not real
money. How the Democrats can cling to the trust fund with a straight face is beyond me."
On March 4, Scripps-Howard
columnist, Jay Ambrose's column, "The Big Lie About Social Security," appeared. Ambrose wrote, "The money -- the so-called
trust fund -- has not been saved. It has been spent on other programs. When it comes time to lay its hands on it, the government
will not open a vault somewhere and haul the dollars out. It will have to tax or borrow of some combination of the two, and
the implications are far reaching, very far reaching, trillions of dollars worth of far reaching."
On March 6, Richard
Halicks of The Atlanta Journal-Constitution titled his column, "Basically It's a Promise Bound to Bonds." Halicks wrote,
"The Social Security trust fund is worth about $1.6 trillion. So where's all that money? Stacked in neatly banded $100 bills
in secret government warehouses? Stashed in the gold vaults under the Federal Reserve Bank of New York? Actually, the government
has already spent it. Economists talk about Social Security running into the red in 2018, and they say that the agency can
dip into its trust fund to make up the shortfall through about 2042. But they're talking about money that doesn't technically
exist."
Also on March 6, Joel Havemann, staff writer for the LA Times wrote, "Everyone agrees...that the government
has been spending money from the fund -- money raised through the Social Security tax and that is intended for future retirees.
But debate has escalated over whether the government has the ability -- or even a reliable intent -- to repay that money to
the retirement system. As Bush battles his critics over his plan to restructure Social Security, both sides are characterizing
the trust fund and the IOUs it holds in sharply different ways. Bush, in arguing that the system needs major changes, has
portrayed the trust fund as an unreliable source of money for retirees."
On March 7, USA TODAY reported in an editorial,
"...The cost of paying benefits to the first wave of retiring baby boomers will begin exposing the accounting gimmickry that
is the true driver of the Social Security 'crisis.' ... For years the government has collected more in Social Security taxes
than it needed to pay current benefits...But there is no actual money in the fund. Instead, the government spends the money
for other purposes and issues the fund IOUs. In 2009, the shell game begins to end. The amount by which Social Security taxes
exceed benefits starts to shrink. By 2018...the flow reverses ... Absent large tax hikes or spending cuts, already astronomical
deficits will skyrocket. The problem could have been avoided, and it still could be reduced ... The bottom line is that Washington,
through profligate borrowing and policies that lock in red ink for years to come, is passing the burden to future generations.
And the problem is getting worse."
Also on March 7, David E. Rosenbaum wrote in the New York Times, "All tax
receipts go into the same pot in the Treasury and are spent at the discretion of Congress; for years, excess Social Security
taxes have been used to pay for other programs. The government has made promises to retirees it cannot keep without raising
taxes, imposing deep cuts in other programs or borrowing loads of money."
Smith believes that enough details about
what he calls, "The greatest fraud ever perpetrated against the American people by their government," have now broken through
the shell of government secrecy that it will be impossible to keep the full story from gradually making its way out. "When
it all comes out, I think it will be a much bigger scandal than Watergate," Smith says.
CONTACT: Barbara
Rugel (863) 206-4431 or Allen W. Smith (863) 206-4292; email: ironwoodas@aol.com Website:
http://www.lootingsocialsecurity.com/
Terms and conditions of use applyCopyright © 2004 PR Newswire
Association LLC. All rights reserved.A United Business Media Company
THE SOLUTION
The Smith Solution to Social Security Trust Fund Problem (Proposed by
Author of "The Looting of Social Security")
Winter Haven, Fla--Economist and author, Allen W. Smith, Ph.D., has released his proposed solution to the
problems facing Social Security today. Smith's three-step proposal is outlined below:
1. President Bush
should immediately discontinue his practice of spending the approximately $400 million in Social Security surplus that flows
in each day, and he should instruct the Secretary of the Treasury to invest this money in marketable Treasury bonds.
2. The $1.7 trillion that has already been "borrowed" by the government and spent on other programs must be repaid
and invested in marketable Treasury bonds. Unlike Bush's proposal to borrow between $2 and $3 trillion to launch his
privatization plan, borrowing the $1.7 trillion from the public and using it to pay off the debt to Social Security would
not increase the public debt. The debt to Social Security would go down while the debt to the public would go up by
an equal amount. If these two actions were taken, the Social Security trust fund would have the assets it will need
to continue to pay full benefits until 2042. The Social Security Trustees could sell these marketable Treasury bonds
in the open market as needed to supplement the declining payroll tax revenue without any additional action by the president
or the Congress.
3. The above two steps would solve the short-term Social
Security problem and leave only the actuarial imbalance that will show up no earlier than 2042. That problem can also
be fixed at this time with a single simple action. Remove the Social Security payroll tax cap of $90,000 per year so
that those earning more than $90,000 will pay Social Security tax on their entire income just like everyone else. Those earning
more than $90,000 have received such large tax breaks from the Bush income tax cuts, that they can certainly afford to pay
the additional payroll tax.
Allen W. Smith, who has been crusading for economic education and sound government
fiscal policy for nearly three decades, holds a Ph.D. degree in economics from Indiana University. He is Professor of
Economics Emeritus, Eastern Illinois University. The author of several books, including "The Looting of Social Security:
How the Government is Draining America's Retirement Account," (Carroll & Graf, 2004) and "The Alleged Budget Surplus,
Social Security, and Voodoo Economics," Dr. Smith has appeared on CNBC, CNN, CNNfn, and more than 150 radio talk shows to
discuss Social Security.
CONTACT: Barbara Rugel (863) 206-4431 or Allen W. Smith (863) 206-4292; email:
ironwoodas@aol.com Website: www.lootingsocialsecurity.com SOURCE: Allen W. Smith ###
Bush
Must Be Held Accountable for
Emptying
the Social Security Trust Fund
By Allen
W. Smith, Ph.D.
On March 16, 2005,
President Bush stood before reporters at a press conference and made a statement that should have shocked and outraged every
American who heard it. He said, “We’re paying for a lot
of programs other than Social Security with the payroll tax coming in, thereby leaving a pile of IOUs,”
The issue
of spending Social Security money for non-Social Security purposes was widely debated in the 2000 election campaign. Al Gore denounced this practice and promised to put all payroll tax revenue into a
lockbox from which funds would be withdrawn only to pay Social Security benefits. Bush
also made promises to protect the Social Security surplus, both during the campaign and after becoming president.
In
his radio address to the nation on February 3, 2001, President Bush said, “My plan will keep all Social Security money
in the Social Security system where it belongs.” In his March 3 radio speech
Bush declared, “We’re going to keep the promise of Social Security
and keep the government from raiding the Social Security surplus.”
In
his February 27, 2001 State of the Union address Bush said, “To make sure the retirement savings of America’s
seniors are not diverted in any other program, my budget protects all $2.6 trillion of the Social Security surplus for Social
Security, and for Social Security alone.”
Despite all those
promises, Bush began raiding the Social Security trust fund immediately. His
large tax cuts, which were targeted heavily in favor of the rich, were financed with revenue that came from Social Security
contributions paid by working Americans. And from that point on, the trust fund became a convenient slush fund for the Bush
administration.
The authority to decide whether the surplus payroll taxes would be invested in marketable
“good-as-gold” Treasury bonds or deposited in the general fund and spent, rested exclusively with the president. The Treasury Secretary has statutory authority to decide whether to invest the money
in regular marketable Treasury bonds, or to issue instead special issue government IOUs, which allow the money to be spent.
President Bush should have chosen to invest all surplus payroll tax revenue in marketable
bonds, thus honoring his pledge to the American people. But he chose instead
to have the Treasury Secretary deposit the money in the general fund where it would be available for funding other government
programs.
More than $600
billion in surplus payroll tax revenue has been generated since President Bush took office, and every penny has been spent. More than $400 million additional surplus dollars become available each and every
day, and Bush continues to spend it.
Bush has
been unusually open about his misuse of the trust fund money. In a March 17,
2005 Bloomberg news feature titled, “Bush Belittles Assets in Social Security Trust Fund,” Bush is quoted as having
said in a March 10 speech in Montgomery, Alabama, “The government takes your
money and spends it on other things and puts an IOU, a piece of paper, on your behalf, which may be worth something, and it
may not be worth something,''
President Bush
first publicly acknowledged misusing Social Security money in a Washington speech on February 9, 2005. He said, “The money—payroll taxes going into the Social Security are spent. They’re spent on benefits and they’re spent on government programs. There is no trust.”
There may
be “no trust” when it comes to Bush’s handling of Social Security money, but there most certainly is a trust
fund. That fund is empty today because President Bush has used the money as if
it were general fund revenue to pay for tax cuts, the war in Iraq, and many other programs.
The American people must demand that Bush stop raiding the trust fund and replace the money he has already spent.
This can
be accomplished by borrowing enough from private investors to pay off the debt to Social Security. The Social Security funds should then be invested in marketable Treasury bonds, which are default
proof. Such action would not increase the national debt. It would just shift the Social Security debt to private investors. This is the only way to insure that
the Social Security contributions of working Americans will be used to fund retirement benefits instead of ending up in a
government slush fund.
Copyright 2005,
Allen W. Smith
10:39 pm est
Saturday, March 12, 2005
Looted Social Security Trust Fund Money Must
Be Repaid
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'Looted Social Security Trust Fund Money Must Be Repaid,' Says Author of 'The Looting of Social
Security'
WINTER HAVEN, Fla., March 10 /PRNewswire/ -- "The first steps toward solving the Social Security problem must be an immediate
halt to the ongoing daily spending of Social Security money on other programs, followed by a repayment of the $1.7 trillion
that has already been 'borrowed' and spent," says economist Allen W. Smith, author of the book, "The Looting of Social Security:
How The Government Is Draining America's Retirement Account." (Carroll & Graf, 2004).
Smith says that he is baffled and bewildered that President Bush continues to get by with spending approximately $400 million
of Social Security money daily on other programs after having misused $509 billion in Social Security funds during his first
term.
According to Smith, "After pledging over and over during the 2000 presidential campaign not to spend any of the Social
Security surplus, Bush further cemented that pledge during his first State of the Union Address delivered on February 27,
2001 with the following statement:
"To make sure the retirement savings of America's seniors are not diverted in any other program, my budget protects all
$2.6 trillion of the Social Security surplus for Social Security, and for Social Security alone."
In sharp contrast to that promise, Smith said Bush openly acknowledged spending all Social Security surplus in a speech
delivered in Pennsylvania on February 10, 2005. According to Smith, Bush stated,
"Every dime that goes in from payroll taxes is spent. It's spent on retirees, and if there's excess, it's spent on government
programs. The only thing that Social Security has is a pile of IOUs from one part of government to the next."
"How can this be?" Smith asks. "Why aren't the American people outraged?"
According to Smith, both George W. Bush and Al Gore entered into solemn covenants with the American people in 2000 to be
honest, responsible stewards of the Social Security surplus, and President Bush reiterated that pledge in his State of the
Union address in 2001.
"The President did not renegotiate his covenant on Social Security with the American people," Smith said. "He didn't even
tell them that he had unilaterally broken the covenant -- at least not until he desperately needed some new ammunition for
his crusade to privatize Social Security. The American people must demand that Bush stop misusing Social Security money and
that the $1.7 trillion already spent be repaid."
CONTACT: Barbara Rugel (863) 206-4431 or Allen W. Smith (863) 206-4292; email: ironwoodas@aol.com
Website: http://www.lootingsocialsecurity.com
Available Topic Expert(s): For information on the listed expert(s), click appropriate link. Allen W. Smith, Ph.D. http://profnet.prnewswire.com/ud_public.jsp?userid=350721
Source: Allen W. Smith
CONTACT: Allen W. Smith, +1-863-206-4292; or Barbara Rugel, +1-863-206-4431, or ironwoodas@aol.com, for Allen W. Smith
Web site: http://www.lootingsocialsecurity.com/
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10:25 am est
Sunday, February 13, 2005
Bush Acknowledges Looting of Social Security
Trust Fund
Bush Acknowledges Looting of Social Security Trust Fund Says Author of 'The Looting of Social Security'
WINTER HAVEN, Fla., Feb. 12 /PRNewswire/ -- "President Bush has finally acknowledged what I have been
saying throughout his entire presidency," says economist and author Allen W. Smith. "The $1.6 trillion of Social Security
surplus money, that is supposed to be in the trust fund waiting for the retirement of the baby boomers has all been spent
on other government programs and replaced with worthless non-marketable government IOU's." Smith, the author of "The
Looting of Social Security: How The Government Is Draining America's Retirement Account," (Carroll and Graf, 2004) has been
waging an uphill battle to alert the public to the fact that Bush and his predecessors have been spending Social Security
money as if it were general fund revenue, in violation of federal law. Smith also charges that President Bush is continuing
to illegally spend approximately $400 million of Social Security money each and every day.
Smith was shocked when Bush
on Wednesday said, "The money-payroll taxes going into the Social Security are spent. They're spent on benefits and
they're spent on government programs. There is no trust." Smith thought that the truth had just accidentally slipped
out when the president let down his guard and strayed from the script. But when Bush made similar statements onThursday
in both North Carolina and Pennsylvania, Smith concluded that the administration was going to begin using the empty trust
fund as part of the effort to convince the public that Social Security is in crisis.
In the Pennsylvania speech, Bush
said, "Every dime that goes in from payroll taxes is spent. It's spent on retirees, and if there's excess, it's spent
on government programs. The only thing that Social Security has is a pile of IOUs from one part of the government to
the next."
Smith said, "I have been doing everything in my power over the past four years to convince the public that
Bush was illegally spending every dollar of Social Security surplus in direct violation of his many promises during the 2000
presidential campaign not to touch the Social Security money, and his solemn pledge during his State of the Union Address
on February 27, 2001 'To make sure the retirement savings of America's seniors are not diverted in any other program.'"
"From
my perspective," Smith continued, "President Bush clearly admitted to looting the Social Security trust fund in three separate
speeches this week. I suspect that he and his advisers took a calculated risk that by revealing the ongoing looting
that has taken place over the past 20 years he would have more ammunition for his current campaign to undermine Social Security.
But I think he made a big political mistake. When America's workers realize that they have been the victims of the greatest
fraud ever perpetrated against the American people by their government, I think there will be an angry public outcry demanding
that the looting be stopped and that the money already looted be paid back to the trust fund and invested in marketable Treasury
bonds. If that is done, Social Security will then be able to pay full benefits until 2042."
CONTACT: Barbara
Rugel (863) 206-4431 or Allen W. Smith (863) 206-4292; email: ironwoodas@aol.com Website: http://www.lootingsocialsecurity.com Available Topic Expert(s): For information on the listed expert(s), clickappropriate link.Allen W. Smith, Ph.D. http://profnet.prnewswire.com/ud_public.jsp?userid=350721 SOURCE Allen W. Smith Web Site: http://www.lootingsocialsecurity.com More news from PR Newswire...
Issuers of news releases and not PR Newswire are solely responsible for the accuracy of the content.Terms
and conditions, including restrictions on redistribution, apply. Copyright © 1996-2004 PR Newswire Association LLC. All Rights Reserved. A United Business Media company.

7:10 pm est
Saturday, February 5, 2005
Solution to Social Security Trust Fund Fraud
and Actuarial Deficit
Solution to Social Security Trust Fund Fraud and Actuarial Deficit Proposed by Author of 'The Looting of Social Security'
WINTER HAVEN, Fla., Feb. 4 /PRNewswire/ -- Economist and author Allen W. Smith, Ph.D., today released
his proposed solution to the Social Security fraud problem and the long-term actuarial deficit. Smith's three-step proposal
is outlined below: 1. President Bush should immediately discontinue his practice of spending the approximately $400
million in Social Security surplus that flows in each day, and he should instruct the Secretary of the Treasury to invest
this money in marketable Treasury bonds. 2. The $1.6 trillion that has already been "borrowed" by the government and
spent on other things must be repaid and invested in marketable Treasury bonds. Unlike Bush's proposal to borrow between
$2 and $3 trillion to launch his privatization plan, borrowing the $1.6 trillion from the public and using it to pay off the
debt to Social Security would not increase the public debt. The debt to Social Security would go down while the debt to the
public would go up by an equal amount. If these two actions were taken, the Social Security trust fund would truly have
the assets it will need to continue to pay full benefits until 2042. The Social Security Trustees could sell these marketable
Treasury bonds in the open market as needed to supplement the declining payroll tax revenue without any additional action
by the president or the Congress. 3. The above two steps would solve the short-term Social Security problem and leave
only the actuarial deficit that will show up no earlier than 2042. That problem can also be fixed at this time with a single
simple action. Remove the Social Security payroll tax cap of $90,000 per year so that those earning more than $90,000
will pay Social Security tax on their entire income just like everyone else. Those earning more than $90,000 have received
such large tax breaks from the Bush income tax cuts, that they can certainly afford to pay the additional payroll tax. Smith
summarizes his view of President Bush's actions with regard toSocial Security as follows: "President Bush spent $509
billion of Social Security surpluses during his first term, and he continues to spend Social Security money for non-Social
Security purposes each and every day while asking the public to believe that he really wants to 'save and strengthen' the
program. His actions show no evidence that he truly wants to strengthen the system. They are more consistent with those
of a person who wants to drive as many nails into the coffin of Social Security as possible. Now he is trying to drive
a giant spike into that coffin to make sure the system, as we know it today, cannot survive in the long term. It is
time for President Bush to be honest and truthful with the American people." Allen W. Smith, who has been crusading
for economic education and sound government fiscal policy for nearly three decades, holds a Ph.D. degree in economics from
Indiana University. He is Professor of Economics Emeritus, Eastern Illinois University. The author of several
books, including "The Looting of Social Security: How the Government is Draining America's Retirement Account," (Carroll &
Graf, 2004) and "The Alleged Budget Surplus, Social Security, and Voodoo Economics," Dr. Smith has appeared on CNBC, CNNfn,
and more than 100 radio talk shows to discuss Social Security. CONTACT: Barbara Rugel (863) 206-4431 or Allen W. Smith
(863) 206-4292; email: ironwoodas@aol.com Website:
http://www.lootingsocialsecurity.com
Available Topic Expert(s): For information on the listed expert(s), clickappropriate link.Allen W. Smith, Ph.D.
http://www.profnet.com/ud_public.jsp?userid=350721SOURCE Allen W. Smith Web Site: http://www.lootingsocialsecurity.com
Issuers of news releases and not PR Newswire are solely responsible for the accuracy of the content.Terms
and conditions, including restrictions on redistribution, apply. Copyright © 1996-document.write(thisYear);2005 PR Newswire Association LLC. All Rights Reserved. A United Business Media company.

9:52 am est
Wednesday, January 12, 2005
Bush Paving Way for Default on Social Security
IOUs
“Bush Is Paving the Way for the Government
to Default on its Debt to Social Security,” says Economist
Economist and
author, Allen W. Smith, Ph.D., has issued the following statement about Bush’s motives for pushing Social Security reform:
“In 1941, Franklin D. Roosevelt told Columbia University professor, Luther Gulick, ‘We
put those payroll contributions in so as to give the contributors a legal, moral, and political right to collect their pension
and unemployment benefits with those taxes in there. No damned politician
can ever scrap my Social Security Program.’
“President Bush must relish the fact that he is the first ‘damned politician’
to even try to scrap Roosevelt’s Social Security program. Bush is laying
the building blocks to make sure he leaves a legacy that conservatives can celebrate for decades to come. By making his tax cuts permanent, and continuing to loot and spend approximately $430 million of Social
Security money each and every day (after looting $509 billion during his first term), Bush will leave a fiscal legacy that
will almost guarantee a default on the government’s massive debt to Social Security at some point down the road.
“According to the 2004 Social Security Trustees Report, in order for full Social Security benefits
to be paid after 2018, the government must repay massive amounts on an annual basis.
For 2040, the government would have to budget $959.8 billion for repaying that year’s installment of ‘borrowed’ Social Security money. This is more
than twice the amount that was budgeted for national defense in 2004.
“Where will the money come from to repay this humongous debt?
It won’t come from cashing in marketable Treasury bonds, because the Social Security trust fund does not contain
any marketable bonds. Prior to 1981, when there was rarely a Social Security surplus, at least some of any surplus was invested
in regular public issue marketable Treasury bonds, the same kind of bonds that Ross Perot and the Japanese were buying, and
the trust fund could have continued investing all of the surplus in such regular Treasury bonds. If it had, we would have no Social Security solvency problem until 2042.
However, when large planned annual surpluses appeared on the horizon as a result of the sharp hike in payroll tax rates
in 1983, the government quietly abandoned the practice of issuing regular marketable Treasury bonds to Social Security. Almost nobody knew about it at the time, and few know about it even today, but the
government established a policy of issuing only ‘special issues,’ a type of government IOU designed exclusively
for the government trust funds. These special issues are worthless unless and until the government chooses to repay the looted
money by raising taxes or borrowing massive additional funds from the public.
“When future
politicians begin looking for a way out of this terrible bind, it won’t be hard to find.
The government will be in a position to default on the special issue IOUs held only by the government trust funds without
defaulting on any of its other debts, and thus without causing the kind of disastrous impact on international financial markets
and the nation’s credit status that would result from a general default. The
‘Karl Rove’ of that period will jump up and down with joy as he or she shouts, ‘It worked! It worked!! Just like Bush planned when he set out to dismantle Social Security.’ ”
Allen W. Smith, who has been crusading for economic education and sound government fiscal
policy for nearly three decades, holds a Ph.D. degree in economics from Indiana University.
He is Professor of Economics Emeritus, Eastern Illinois University. The
author of several books, including “The Looting of Social Security: How the Government is Draining America’s Retirement
Account,” (Carroll & Graf, 2004) and “The Alleged Budget Surplus, Social Security, and Voodoo Economics,”
Dr. Smith has appeared on CNBC, CNNfn, and more than 100 radio talk shows to discuss Social Security.
CONTACT: Barbara Rugel (863) 206-4431 or Allen W. Smith (863) 206-4292; email: ironwoodas@aol.com
Website: www.lootingsocialsecurity.com
SOURCE: Allen W. Smith
###

10:35 pm est
Friday, January 7, 2005
Bush Broke Social Security Lockbox Promise
Bush Broke Social Security Lockbox Promise, Says Author of “The Looting of Social
Security”
WINTER HAVEN, Fla.-“The current Social Security crisis is the direct result of
the greatest fraud ever perpetrated on the American people by their government,” says economist Allen W. Smith, Ph.D.,
author of “The Looting of Social Security: How the Government is Draining America’s Retirement Account,”
(Carroll and Graf, 2004) According to Smith, who has been researching Social Security funding for the past five years, “The
problem began with President George H. W. Bush who used Social Security money as if it were general fund revenue from day
one of his presidency. The practice has continued ever since, so the $1.5 trillion in Social Security surplus revenue generated
by the 1983 payroll tax increase, and earmarked specifically for funding the retirement of the baby boomers, is gone. Smith traces this fraud against the American people as follows.
Senators Reid, Hollings,
and Moynihan Tried to Block the “Embezzlement”
Senators Reid, Hollings, and Moynihan tried to block the first President Bush’s
fraudulent use of Social Security money. In 1990, Senator Daniel Patrick Moynihan
of New York introduced legislation to repeal the 1983 payroll tax increase in an effort to keep the surplus Social Security
money out of Bush’s hands. The 1983 legislation had departed from the traditional
pay-as-you-go method of funding Social Security. Upon the recommendation of the
commission headed by Alan Greenspan, Congress enacted a tax increase that would result in the baby-boomer generation paying
for the retirement benefits of two generations. They were taxed enough to prepay
the cost of their own generation’s retirement, in addition to paying for the retirement of the previous generation. Senator Moynihan was outraged to see the administration embezzling and spending the
money that was supposed to be building up a large reserve with which to fund the retirement of the baby boomers.
Bush, was angered by Moynihan’s
proposal because, if enacted, it would deprive him of the Social Security surplus money for his budget. He lashed out at Moynihan during a news conference on January 24, 1990.
The President said, “I oppose Moynihan… I don’t want to see the benefits of Social Security cut. It is odd that a Republican president …is the one that is protecting the sanctity
of the Social Security benefits.” During that news conference, reporters
asked Bush a number of pointed questions about the misuse of Social Security money, but the president evaded every single
question. Bush did not deny the accusation that he was misusing Social Security
money, and provided no justification for his actions.
Later that day, Senator Moynihan responded to the president’s statement in a speech
on the Senate floor. Moynihan said, “Mr. President…If there is a
problem of dissimulation, I would suggest that it resides with the present practice of using Social Security trust funds as
general revenues. My distinguished friend, the Republican Senator from Pennsylvania,
Senator Heinz, has used a very direct word for this. He says it is called embezzlement.”
{Congressional Record}
On October 9, 1990, Senator Harry Reid of Nevada made the following statement on the
Senate floor… “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…I publicly commend and applaud the vigorous activity generated by the Senator from New York
because… on that chart in emblazoned red letters is what has been taking place here, embezzlement.” {Congressional
Record)
Just a year earlier, on October 13, 1989, Senator Fritz Hollings
of South Carolina, in a speech on the Senate floor, expressed his outrage at the fraudulent practices that had been taking
place. He said, “Of course, the most reprehensible fraud in this great
jambalaya of frauds is the systematic and total ransacking of the Social Security trust fund in order to mask the true size of the deficit…The Treasury is siphoning off every dollar of the Social Security
surplus to meet current operating expenses of the Government…The hard fact is that, in the next century, the Social
Security system will find itself paying out vastly more in benefits than it is taking in through payroll taxes. And the American people will wake up to the reality that those IOU’s in the trust fund vault are
a 21st century version of Confederate banknotes.”{Congressional Record} (Senator Hollings’ proposal
to make it unlawful to include Social Security funds in budget calculations was signed into law by President Bush on November
5, 1990 as Section 13301of the Budget Enforcement Act of 1990. However, Bush
continued to loot Social Security in violation of the law.
Like Father, Like Son
George W. Bush’s father looted
every penny of the Social Security surplus generated during his term, and Bill Clinton continued to treat the surplus as if
it were general revenue. The money continued to be “embezzled” and spent, with almost nobody aware that the “crime” was taking place. However,
it finally came to light during the 2000 presidential campaign.
Before the 2000 Democratic convention, I sent materials to
Al Gore, through many channels, urging him to take a public stand against any further looting of Social Security. Among the materials I sent was my then newly published book, “The Alleged Budget Surplus, Social
Security, and Voodoo Economics.” I don’t know whether it was my letters
and materials, or someone else’s, that prompted Gore to make his “lockbox” proposal. In either case, the cat was out of the bag, and Bush also promised to keep his hands off Social Security
money. Bush reiterated this pledge over and over, and further cemented it with
a statement in his first State of the Union address, delivered on February 27, 2001.
In no uncertain terms, Bush said, “To make sure the retirement savings of America’s seniors are not diverted
to any other program, my budget protects all $2.6 trillion of the Social Security surplus for Social Security, and for Social
Security alone.”
Like many of his other promises, Bush broke that promise. He “embezzled” and spent every dollar of the $509 billion in surplus Social
Security revenue generated during his first term, making him the biggest contributor of all to the real Social Security problem. Most Americans are probably under the assumption that the looting of Social Security
ended four years ago when both Bush and Gore promised not to touch any more of the Social Security money. This looted Social Security money became a major source of funding for Bush’s tax cuts for the rich. Social Security is $509 billion deeper in the red today because of Bush’s looting
over the past four years, and he continues to loot the fund to the tune of approximately $438 million dollars each and every
day. To paraphrase Ronald Reagan, George W. Bush is not the solution to the Social
Security problem, he is the problem.
CONTACT: Barbara Rugel (863) 206-4431 or Allen W. Smith (863) 206-4292;
email ironwoodas@aol.com
website www.lootingsocialsecurity.com
SOURCE: Allen W. Smith
###

10:36 pm est
Bush Is Selling a Trojan Horse
Bush is Selling a Trojan Horse
Winter Haven, Fla.- “President Bush is trying to sell his privatization proposal
as a plan to save Social Security, when it is actually a clever scam designed to destroy the program that conservatives have
hated since its enactment in 1935,” says economist Allen W. Smith, Ph.D., author of the book, “The Looting of
Social Security: How the Government is Draining America’s Retirement Account” (Carroll and Graf, 2004). Smith argues that Social Security is not facing an imminent crisis, and that Bush is using scare tactics
in an effort to stampede the public into accepting his plan. According to Smith,
the Bush plan is a Trojan horse with which Bush, Greenspan, and fellow conservatives hope to destroy the current Social Security
program before the American people wake up to the fact that $1.5 trillion of Social Security money has been spent on other
things by the government, in violation of federal law, over the past two decades, with more than one-third of the money having
been looted during Bush’s presidency.
Smith says
that Alan Greenspan was the chief architect of a plan to fix Social Security that was enacted into law in 1983. That legislation increased payroll tax rates high enough so the baby boomers would be required to prepay
the cost of retirement benefits for themselves, in addition to paying for the benefits of the preceding generation. The 1983 payroll tax increase has generated more than $1.5 trillion in Social Security surplus, earmarked
specifically for funding the retirement of the baby boomers. Because of that
tax increase, the trust fund should today contain at least $1.5 trillion in real
liquid assets in the form of regular marketable Treasury bonds just like those bonds in which many private pension plans invest,
but it does not contain any marketable bonds.
According to Smith, “Most Americans do not yet know about the ‘theft’ of the Social
Security money, and Greenspan and Bush would like to keep it this way. After
all, Greenspan, who supposedly fixed the baby boomer problem in 1983, has kept silent while the last three administrations
have spent Social Security money as if it were general revenue. He knows that
the government has made no provision for repaying the money, despite the fact that, beginning in 2018, the money must be repaid
in order for full benefits to be paid. By focusing the nation’s attention
on a proposed privatization plan, the administration hopes to draw attention away from the unlawful use of Social Security
money.”
According to Smith, the surplus Social Security money has been spent and replaced with non-marketable
special-issue government IOUs that, unlike regular marketable Treasury Bonds, have no real value and thus are not real assets. These IOUs are nothing more than accounting entries that tell us how much Social Security
money has been taken by the government. They are akin to a note that a bank robber
might leave in the vault stating the amount of money he took. When the Social
Security program begins to experience annual deficits in 2018, these so-called “bonds” in the trust fund will
be of no help, whatsoever, in raising additional funds to help pay benefits.
According to the 2004 Social Security Trustees Report, Social Security will run massive annual deficits
in the years ahead. Table VI.F9 of the report, reveals that there will be annual
deficits of $281.1 billion in 2025; $511.9 billion in 2030; $747.0 billion in 2035; and $959.8 billion in 2040. Unless
the government can come up with these massive amounts of money to repay the money it has looted from the trust fund, Social
Security benefits will have to be cut. Privatization does nothing to change this
harsh reality. Instead, it is being used as a smoke screen to cover up a crime
against the American public that makes Enron pale in comparison.
CONTACT: Barbara Rugel (863) 206-4431 or Allen W. Smith (863) 206-4292; email: ironwoodas@aol.com
SOURCE: Allen W. Smith
###

10:30 pm est
Sunday, October 24, 2004
Response to Reader Letter
Dear Mr. Coberly,
Thanks for your
email. I will try to answer your questions with a list of factual statements about Social Security.
1.
There is no current deficit in the Social Security fund in the accounting sense. The 1983 payroll tax increase has been
generating annual surpluses that now total $1.5 trillion that is supposed to be in the trust fund. This year the Social
Security surplus was approximately $150 billion, and we will continue to have annual, but declining surpluses for about 14
more years.
2. It is currently estimated by the Social Security trustees that in 2018 the fund will begin running
deficits that will become larger and larger each year. The plan was to supplement the insufficient payroll tax revenue
for 2018 and the years that follow by dipping into the large reserve that was built up during all those years of surpluses
(1983-2018) which was specificially earmarked by the 1983 legislation for the funding of the retirement of the baby boomers.
3. The reserve is supposed to be large enough to adequately supplement payroll tax revenue so that full
benefits can be paid until the year 2042. By that date, the youngest of the baby boomers would be 78 years old.
4. Beginning in 2043 the payroll tax revenue would still be sufficient to pay approximately 73 percent of benefits
but not 100 percent. There are many ways to fix that problem. One would be to raise the cap on the amount of
income subject to Social Security which was $83,000 in 2003. This would mean a tax increase for those people who now
earn more than $83,000. For example, if the cap was raised to $100,000, individuals who earn $100,000 or more would
have to pay payroll tax on $17,000 of additional income but their potential benefits upon retirement would also rise.
Those people currently earning less the $83,000 would not be affected. The long-term problem with Social Security after
2042 could be totally fixed by raising the cap on income to a level needed to generate sufficient income to enable the system
to continue to pay 100 percent indefinitely. This is only one of many ways to fix the long-term Social Security problem
which is definitely fixable despite the scare tactics that are being used to "justify" privatization.
This would
be the end of the story IF the $1.5 trillion of Social Security surplus that has been generated so far by the
1983 payroll tax increase was actually in the trust fund where it is supposed to be, and IF the approximately
$438 million in Social Security surplus that is currently being generated were going into the trust fund where it is supposed
to go.
THE REAL SOCIAL SECURITY CRISIS THAT NOBODY IS TALKING ABOUT IS THAT every dollar of that $1.5 trillion
has been "borrowed" (looted) by the government and spent on other things and the government continues to loot and spend the
approximately $438 million in Social Security surplus that is generated each and every day. The Social Security
trust fund contains no real assets. It contains only non-marketable special issue government bonds which are nothing
more than accounting entries telling us how much money has been looted. And, despite the fact that both Gore and Bush
promised to put the Social Security surplus in a lock box, the entire $509 billion that has been generated during the Bush
presidency has been looted and the government continues to loot and spend for other things approximately $438 million each
and every day. The government has made no provision for repayment of this money and has no resources with which to repay it
unless it enacts massive tax increases beginning in 2018. I don't think the government will repay the money it has looted
unless angry Americans demand it.
Solution:
1. Stop looting the Social Security trust fund.
2.
Enact legislation that requires the government to repay the $1.5 trillion that it has already looted in installment between
now and 2018.
I hope this helps. I continue to be frustrated by the fact that neither
presidential candidate is addressing this issue and the news media is not covering it. Most Americans don't have a clue
that their Social Security contributions have been looted. I am trying to change that and need all the help that I can
get.
Sincerely,
Allen W. Smith, Ph.D.

10:43 pm edt
Saturday, October 9, 2004
Baby Boomers
Have Already Paid for Their Social Security Benefits
By Allen W. Smith, Ph.D.
(Originally Published in the October 2004 Issue of
Southern California Senior Life)
In 1982 Alan Greenspan chaired
a Presidential Commission on Social Security that was given the task of “fixing”
the baby boomer problem in advance of their retirement, when a larger than normal number of workers would hit retirement age
at around the same time, significantly stretching the Social Security rolls. Greenspan and the other commission members decided
that the baby boomers needed to pay higher payroll taxes, beginning in 1983, and continuing until they retired to meet future
needs. This money was supposed to be used to build up a large reserve to supplement payroll tax revenue when the boomers retired.
In 1983, the commission’s
recommendations were enacted into law, and the baby boomers, along with all other workers, have been paying the higher taxes
ever since. By the time they retire, the baby boomers will have paid enough into the Social Security trust fund to cover the
payment of full benefits to all members of their generation until the year 2042. By that time the youngest of the baby boomers
will be 78 years old. Only after 2042 would there be an actuarial problem with the fund. That would have been the end of the
story if the government had kept its hands out of the Social Security cookie jar. However, politicians from both political
parties have been using the Social Security surplus money for non-Social Security purposes ever since the surpluses first
began to show up in the 1980s.
As a result, the government
has “borrowed” every dollar of the $1.5 trillion surplus revenue generated by the 1983 payroll tax increase, and
used it to fund tax cuts and programs not related to Social Security. Furthermore, the government continues to loot the fund
to the tune of more than $400 million per day. The Social Security surplus money was supposed to be invested in already existing
marketable Treasury securities that were held by the public. This would have
resulted in a reduction in the publicly-held debt, and the Social Security surplus would have been invested in real marketable
assets that could be redeemed by the Social Security Trustees without any action by Congress or the president.
Instead, the government
spent the surplus Social Security money as if it were general revenue and replaced it with special-issue, non-marketable government
IOUs that, unlike regular marketable Treasury certificates, are worthless until and unless the government at some point in
the future chooses to repay the money by raising taxes and/or borrowing additional money from the public. The government has made no provision for the repayment of the $1.5 trillion in Social Security money that
it has already looted, or for the additional $400 million plus that it is taking and spending each and every day.
In 2018 the Social Security
system will begin to run annual deficits after having run continuous surpluses for 34 years because of the 1983 tax increase.
According to the original plan, the Social Security trustees would then begin dipping into the prepaid reserve to supplement
the inadequate payroll tax revenue. This reserve, along with payroll tax revenue, would allow the fund to pay full benefits
until 2042. But the trust fund is empty, so there is no money to supplement the inadequate payroll tax revenue unless the
government is able to repay the looted money. The amount of principle plus interest that the government would have to repay
out of the general fund in order for Social Security to remain solvent is staggering a few years down the road.
According to the 2004 Social Security Trustees Report, in the year
2035, the government would have to spend $747 billion from the general fund to pay enough interest and principle on their
debt to Social Security so that full benefits could be paid. That is approximately 1/3 of the entire 2004 budget of $2.27
trillion which does not contain a single dollar for this soon-to-be line item. In 2040, the government will have to come up
with nearly $1 trillion to pay this new line item. That is more than double what
we have budgeted for national defense in 2004!
The looting problem can be fixed in a matter of months if the government does two things. 1) It must immediately cease the illegal practice of spending Social Security money for non-Social Security
purposes; and 2) Legislation must be enacted that requires the government to repay, in installments over a period of years,
the $1.5 trillion in Social Security money that has already been looted. If this
is done, we are left only with the long-term problem that must be resolved before 2042.
There is no urgent crisis other than the looting, and that is in no way the fault of the baby-boom generation. The
blame rests squarely on the shoulders of the bureaucrats in Washington.
Copyright 2004 Allen W. Smith | |
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