‘Mr. President, Tell the Truth About the Trust Fund,’ Economist Advises

January 19, 2011

WINTER HAVEN, Fla., Jan. 19, 2011 /PRNewswire/ — The best thing President Obama could say in his State of the Union Address, to help the American public understand the true status of Social Security, would be to tell the whole truth about the so-called Social Security “trust fund,” says economist and author, Allen W. Smith, Ph.D. For years, Smith says, the public has been led to believe that the trust fund holds real marketable assets that can be sold to raise cash for paying future benefits. That was supposed to be the case, Smith points out, but the $2.6 trillion of surplus Social Security revenue, generated by the 1983 payroll tax hike, was not saved and invested, as was the intent of the 1983 legislation. Instead, the surplus revenue has been spent on general government operations. Those IOUs, called “special issues of the Treasury,” are only a claim against future tax collections, and they can be redeemed, only by raising taxes, cutting spending elsewhere, or borrowing. Smith believes that President Obama can gain a lot of credibility with the public by revealing the raiding of the trust fund under Presidents Reagan, Bush I, Clinton, and Bush II. Beginning in 2015, Smith says, full Social Security benefits cannot be paid unless the government begins repaying the “borrowed” money.

Dr. Smith, author of “The Looting of Social Security” and “The Big Lie: How Our Government Hoodwinked the Public, Emptied the S.S. Trust Fund, and caused The Great Economic Collapse,” says there is no justifiable reason for cutting Social Security benefits. Since most of the raided money was used to replace the lost revenue from the unaffordable income tax cuts for the rich, Smith thinks the money should be repaid through a special tax imposed on that same group of taxpayers. If the “borrowed” money is repaid, full benefits can be paid until 2037, Smith points out. And, Social Security could be made fully solvent for many more decades by simply removing the earnings cap on income subject to payroll taxes.

    Allen W. Smith, Ph.D.
    Email: ironwoodas@aol.com
    Website: www.thebiglie.net

SOURCE Ironwood Publications

Source: newswire

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