WINTER HAVEN, Fla., Feb 11, 2011 /PRNewswire-USNewswire/ -- Economist and author Allen W. Smith, Ph.D. has been saying for ten years that the so-called Social Security trust fund contains only non-marketable IOUs that cannot be converted to cash or used to pay benefits. According to Smith, the IOUs are nothing more than claims against future tax collections, which can be redeemed only by raising taxes, cutting other programs or borrowing more from the public. Smith says that all of the $2.6 trillion surplus revenue, generated by the 1983 payroll tax hike, has been spent by the government for other things.
Smith, who was dubbed, "a voice crying in the wilderness," by CNN anchor Lou Waters during a TV interview in 2000, is no longer alone in arguing that the trust fund has no real economic value.
Fortune Senior Editor at Large, Allan Sloan, wrote in a December 21 article, "The trust fund is nothing more than a trap and a fantasy for those who think it's a solid foundation for Social Security." http://finance.fortune.cnn.com/2010/12/21/dont-trust-social-securitys-fund/ Sloan had previously expressed similar views in his August 10 Washington Post column entitled, "Social Security, the trust fund and funny money," http://www.washingtonpost.com/wp-dyn/content/article/2010/08/09/AR2010080905559.html
Other journalists who have expressed the view that the trust fund is a myth include:
"The Social Security trust fund myth" by E. Thomas McClanahan, Kansas City Star, December 26, 2010
"Social Security Turns 75, Starts Cadging From the Kids" by Eric Schurenberg, Editor in Chief, CBSMoneyWatch.com, August 24, 2010
"Your payroll taxes go into bottomless hole" by Terry Savage, Chicago Sun-Times, November 28, 2010
"The Social Security Trust Fund Myth" by Steve Vernon, CBS Money Watch, February 1, 2011
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 the government has been misleading the public for a quarter-century into believing the surplus Social Security contributions were being saved and invested, when in fact they were being diverted into the general fund and spent on whatever the government chose to spend them on.
SOURCE Ironwood Publications