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—12/12/2014; 12/13/2014; 12/14/2014
The Great Social Security Heist
America is, today, facing a crisis of conscience unlike anything the nation has ever experienced in modern times. Our traditional transparency in government, and the right of the people to know what the government does, have been violated for the past thirty years, and the wool continues to be pulled over the eyes of the American public to a greater extent than ever before.
The Social Security Amendments of 1983, were sold to Congress, and to the American public, as a “fix” to Social Security’s future solvency problems. The steep hike in payroll taxes was supposed to generate enough surplus revenue to cover the cost of retirement benefits for the baby boomers.
The tax hike generated a total of $2.7 trillion in surplus revenue, between its enactment in 1983 and 2010, when the surpluses came to an end. That would have been approximately enough money to finance the retirement of the baby boomers, if the money had been saved and invested in marketable U.S, Treasury bonds, as was the intent of the legislation. But none of the surplus revenue was saved or invested in marketable Treasury bonds or any other kind of real assets.
The $2.7 trillion in surplus revenue is gone. Where did it go? It went to the government, and was used as a giant slush fund to spend any way the government chose to spend it. In other words, the government took the money and spent it as general revenue. This means the money was either borrowed, or stolen, by the government. Since there are no plans to repay the money, the $2.7 trillion of Social Security contributions, faithfully made by working Americans, appears to have been stolen by the government.
On March 16, 2011, Senator Tom Coburn (R-OK) publicly admitted, during a Senate speech, that he, and his fellow members of Congress, had stolen Social Security money and spent it on general government operations. Senator Coburn said, “Congresses under both Republican and Democrat control, both Republicans and Democrat presidents, have stolen money from Social Security and spent it. The money’s gone. It’s been used for another purpose.”
Most Americans had no way of hearing about Senator Coburn’s explosive statement, because it was not widely circulated by the media. The same has been true of all other news stories about the Social Security fraud. The simplest explanation of why the media fails to report important news about Social Security is that the media know that the government does not want this big dirty secret reported. They remember what happened to Dan Rather when he reported a story that the White House did not want reported.
But, the explanation may be far more complex. A powerful, heavily-funded, anti-Social Security movement, was launched in 1983 by the Cato Institute and the Heritage Foundation. This powerful alliance now has the financial backing of the Koch brothers and most of corporate America. The alliance may have sufficient economic power to punish media outlets which violate their wishes to keep the Social Security fraud a secret. No matter how the enemies of Social Security pulled it off, they have succeeded in diminishing the degree of freedom of the press, at least on this issue.
As the government spent the Social Security money, it replaced the money with government IOUs, called Special Issues of the Treasury. These IOUs serve as an accounting record of how much money was taken from Social Security, and spent for non-Social Security purposes. The IOUs are not marketable, and they cannot be converted into cash or used to pay Social Security benefits. They are essentially worthless pieces of paper, stored in a fireproof filing cabinet, located in a federal office building, in Parkersburg, West Virginia. On April 5, 2005, President George W. Bush, visited the so-called “trust fund,” and the filing cabinet was photographed for the whole world to see.
There have been extensive public efforts to equate these worthless IOUs with the “good-as-gold”marketable U.S. Treasury bonds held by China and our other creditors. That is another attempt to keep the public from finding out the truth. The real, marketable Treasury bonds can be sold or converted into cash at any time. They are not at all like the IOUs in the trust fund. If the surplus Social Security revenue had been invested in marketable Treasury bonds, as was the intent of the 1983 legislation, Social Security would have no short-term solvency problem today, and it could continue to pay full benefits for at least two more decades.
The $2.7 trillion of accumulated Social Security reserves was stolen and spent for non-Social Security purposes. Social Security does not have that money, and the government no longer has it. The only thing of real value that Social Security has is its annual tax revenue, plus interest, which is not nearly enough to cover the payment of full benefits even for a single year.
The American people have a right, and an urgent need, to know the truth about the Social Security trust fund. If it became widely known, by the public, that the government took $2.7 trillion of the Social Security contributions of working Americans, and spent it for non-Social Security purposes, there might be a national outrage so strong that the government would be forced to raise taxes and repay its debt to Social Security. But the people do not know they have been cheated by their government. And they will not know about it unless, and until, there is a change in the policies of the news media in America.
Like Senator Coburn, almost all of the members of Congress are aware of the Social Security fraud. In addition, many journalists also know the facts. But most of the public doesn’t have a clue that the Social Security surplus revenue has all been spent for non-Social Security purposes. How could the public possibly know when none of these facts are reported by the mainstream media, and they are constantly bombarded with lies from the SSA, the AARP, and the NCPSSM?
I can think of no other situation in modern history where the public was denied access to knowledge of important government actions that were so detrimental to the public. I know of no other period, except perhaps in time of war, that freedom of the press to report all the news was so restricted. There are many reasons to worry about the future of our treasured Democracy at the present time. But I know of no greater threat to our future than for the government, over a 30-year period, to misappropriate billions of dollars that were earmarked for a specific program. And the government continues to cover up their big dirty secret.
I have devoted the past 14 years of my life, and more than $55,000 of personal money, to a relentless effort to expose this great Social Security fraud. I have done extensive research on Social Security financing, and I have published three books on the subject. I know that the truth about Social Security is being suppressed. In addition to the Social Security Administration (SSA), the leadership of both the AARP and the NCPSSM have been consistently telling the American people things that they know to be untrue.
I first stumbled onto the government’s misuse of Social Security funds while doing research for a book in 2000. I was so shocked that I refused to accept the findings of my own research, at first. What I thought I had discovered was so unthinkable that I couldn’t see how it could possibly be true. But, after additional research, it became crystal clear that the government was systematically embezzling surplus Social Security revenue and spending it for other purposes.
I couldn’t wait to tell the news media, and the whole world, what I had found. But I soon learned that nobody wanted to hear what I had to say. I had dug up something that the American people were not supposed to ever know about. Although, prior to my discovery, I had been able to get my op-ed articles published in major newspapers on a regular basis, no major newspaper would touch my Social Security articles with a 50-foot pole. It soon became clear that I was dealing with a taboo topic. It appeared to me that the media knew that this was a story that the government did not want reported, so they wouldn’t even consider my articles.
That was 14 years ago, and I have been on a relentless campaign to expose “the great Social Security theft” ever since. My efforts were met with oppositions from many sources, including both the AARP and the NCPSSM, organizations that I had been a member of for many years. In early 1994, I thought I was on the verge of getting the whole story out. My book, “The Looting of Social Security” was published by a New York publisher in January of that year. Everything looked good at first. The book received very favorable pre-publication reviews from both the Boston Globe and the American Library Association’s Booklist , and it started out selling well.
However, a few weeks before President George W. Bush was scheduled to launch his Social Security privatization campaign, my book was suddenly pulled from bookstores throughout the nation, and was listed as “unavailable” by Amazon.com. I asked my publisher to revert the publishing rights back to me, so I could publish the book elsewhere, but the publisher refused to relinquish the publication rights. That pretty much silenced me at the very time Bush launched his privatization campaign.
My new book, “Ronald Reagan and the Great Social Security Heist” traces the Social Security fraud from its beginning, a few months after Reagan was inaugurated President, to the critical problems facing Social Security today. If it could reach a wide audience, it could expose the fraud. If that happens, there will almost certainly be a national scandal that will make Watergate pale by comparison. But the people, who succeeded in blocking my efforts to expose the Social Security fraud for the past 14 years, and who censored my 1994 book, The Looting of Social Security are still out there, and they will almost certainly do everything they can to prevent the new book from reaching a large audience. Let’s hope they fail this time.
Allen W. Smith, Ph.D.