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Allen W. Smith, Ph.D.
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"will be paid back in full by taxes collected in the future -- just as the government has paid back interest and principal on all securities that the government has ever been issued." The statement that the government has always paid back money it owed to Social Security is meaningless. The government never borrowed any sizeable ammount from Social Security prior to the 1983 legislation because Social Security did not run sizeable surpluses in the past. If a person had borrowed $100 from a bank in the past, and repaid it, the bank would not consider that prior record as proof they could loan $100,000 or $100 million to the person without risk. The $2.6 trillion was supposed to be saved and invested in marketable bonds. The very fact that the government betrayed the public trust and used that money for general revenue purposes tells us just how little we can trust the government.
Toggle Commented Mar 11, 2011 on Five Social Security Non-Myths at Taking Note
You have left out of your discussion the fraudulent looting of Social Security that has been taking place for the past 25 years. The surplus revenue, generated by the 1983 payroll tax hike, was supposed to be SAVED and used to purchase pre-existing marketable Treasury bonds in the open market, thus temporarily paying down the public debt. Then, when the baby boomers retired, the S.S. trustees could have resold those marketable bonds to raise cash with which to pay benefits to the boomers. THIS WAS NOT DONE! When the first surplus showed up in 1985, instead of saving the money and investing it in real marketable bonds, the government diverted the money to the general fund where it was spent on general government operations. That practice has continued to this day. Every dime of the $2.6 trillion in surplus Social Security revenue has been run through the general fund and spent on wars and other government programs. None of it was saved! Money can be spent or it can be saved. If it is saved, it can also be invested. But once money is spent, there is nothing left to invest. Anyone can verify that none of the Social Security money was saved or invested by looking at the federal budgets for the past 25 years. The total spending by the federal government, including payments of Social Security benefits, greatly exceeded the total revenue,including payroll tax revenue. The government spent all of its general revenue, plus all of the Social Security surplus revenue, plus a great deal of additional borrowed money. The spent money was replaced with non-marketable IOUs which have no real economic value. The government has made no provisions for repaying the looted money. As for your reference to Allan Sloan, he is one of the true giants in the field of business writing. He is an independent thinker who has done more than any other journalist to expose the awful truth about the Social Security trust fund. I know a little bit about the subject, myself. I have dedicated the past ten years of my life to researching and writing about Social Security funding, and I have published four books on the subject. The latest is "The Looting of Social Security: New release of the book "they" didn't want you to read." Allen W. Smith, Ph.D. Professor of Economics, Emeritus Eastern Illinois University 1-800-840-6812
Toggle Commented Mar 11, 2011 on Five Social Security Non-Myths at Taking Note
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Sep 9, 2010