Social Security is under attack and unless supporters of the program unite and demand repayment of the $2.5 trillion that the government has embezzled from the fund, benefit cuts are likely. President Obama’s deficit commission, when it issues its recommendations in December, may call for cutting Social Security benefits under the guise of helping to solve the nation’s deficit and national debt problems.
Social Security has not contributed a dime toward the deficits. On the contrary, the government has been embezzling and spending surplus Social Security revenue for the past quarter-century. I have been trying, for more than a decade, to alert the public to the fact that the government has systematically embezzled surplus Social Security revenue. Unfortunately, the biggest opponents to my efforts have been the AARP and the NCPSSM, who apparently do not want the Social Security fraud exposed. I have sought the cooperation of the ARRP and the NCPSSM for the past six years in exposing the ongoing raiding of the trust fund, but they refuse to have anything to do with me. They have continued to insist that the surplus Social Security money has been saved and invested, as it was supposed to be, and that Social Security can pay full benefits for decades without any changes. This is not true. The trust fund contains nothing of value that can be used to pay Social Security benefits.
I have sent copies of my books and sought meetings, telephone conversations, or even email correspondence, with both the AARP and the NCPSSM, but they have refused to communicate with me in any way, despite the fact that I am a member of both organizations. Most troubling to me, is that these organizations have consistently, and falsely, claimed that the trust fund holds enough real, marketable Treasury bonds to pay full benefits until at least 2037. That is blatantly false! The trust fund is empty. It contains no real assets. This was made abundantly clear on January 21, 2005 when the Comptroller General of the GAO, David Walker, made the following statement: “There are no stocks or bonds or real estate in the trust fund. It has nothing of real value to draw down.” This is a hard and indisputable fact. Yet the senior organizations have continued to claim otherwise.
A third organization, the Alliance for Retired Americans, is now acknowledging that the government has spent the trust fund money and needs to pay it back. ARA president, Barbara J. Easterling, wrote in the Huffington Post on May 28, 2010, “…the government has borrowed $2.6 trillion from the Social Security Trust Fund and will need to pay it back…Social Security can pay beneficiaries in full until 2037 once its loan is paid back.”
This statement represents a major shift in the public stand of the ARA, and I find the wording of Ms. Easterling’s statement a breath of fresh air. If she stands by her words, and if the AARP and the NCPSSM also acknowledge that the trust fund has been raided, and demand that the government repay the looted Social Security money, there is an excellent chance that the plot to cut Social Security can be thwarted.
None of the surplus Social Security revenue, generated by the 1983 payroll tax hike, was saved and invested in anything. It was all looted by the government and used to pay for tax cuts, wars, and other government programs. The IOU’s that have been put in the trust fund, in lieu of real bonds, are worthless pieces of paper that are not marketable, and could not be sold to anyone, even for a penny on the dollar. Since passage of the 1990 Budget Enforcement Act, it has been a violation of federal law to spend Social Security funds for anything other than Social Security benefits. Therefore, it is not accurate to say that the government “borrowed” the money. The government has clearly, “embezzled” or “stolen” all of the money that is supposed to be in the trust fund.
Barbara Easterling appears to acknowledge this fact. She no longer makes an unconditional claim that Social Security can pay full benefits until 2037. She qualifies her statement by saying that full benefits can be paid “once its loan is paid back.” She is now admitting that full benefits cannot be paid unless the government repays the looted Social Security money. I call on the AARP and the NCPSSM to also publicly acknowledge that the approximately $2.5 trillion in Social Security surplus, generated by the 1983 payroll tax hike, has all been spent by the government on other programs. Instead of saving and investing the surplus revenue in public-issue, marketable U.S. Treasury Bonds, as they were supposed to do, the government simply funneled the money through the general fund and spent it as general revenue. The so-called “trust fund bonds” are nothing more than accounting records of how much Social Security money has been spent. They are just IOUs without monetary value, and there is no way the government can use them to raise cash with which to pay Social Security benefits. This was made very clear by a single sentence, buried deeply within the 2009 Social Security Trustees Report. That sentence states,
Neither the redemption of trust fund bonds, nor interest paid on those bonds, provides any new net income to the Treasury, which must finance redemptions and interest payments through some combination of increased taxation, reductions in other government spending, or additional borrowing from the public.
The only way to save Social Security from the budget axe is for all those who truly support Social Security to join together and demand that the government repay the $2.5 trillion it owes to the trust fund. Barbara Easterling, and the ARA, have already taken a step in that direction. If the AARP and the NCPSSM truly want to save Social Security for our children and grandchildren, they will end their false claims that Social Security already has the money to pay benefits for decades to come, and acknowledge that the government will have to repay the $2.5 trillion it owes Social Security in order for the fund to be able to pay full benefits.
Time is running out, and the clock is ticking toward that crucial day in December when the deficit commission will make its deficit-reduction recommendations. Why do the AARP and the NCPSSM continue to mislead the American public about the true status of the Social Security trust fund? They have to know that all of the $2.5 trillion of Social Security money that is supposed to be in the trust fund, has already been spent by the government on other programs. It is a matter of public record. Why are they so reluctant to point this out to their members and to the media? Why don’t the leaders of the AARP and the NCPSSM call a joint news conference during which they explicitly acknowledge that the government has spent the Social Security money for non-Social Security purposes, and publicly demand that the government repay the looted money?
I don’t know what is going on inside the leadership of these organizations. I have been actively seeking to protect the future of Social Security as we now know it and I have been a vocal opponent of privatization. So I do not understand why the AARP and the NCPPSM would consider me a threat and refuse to communicate with me. I have written them, telephoned them, faxed them, and e-mailed them. I have asked for the opportunity to travel to their national headquarters and meet with their leaders in an effort to find out why they want to keep the truth about the Social Security trust fund secret. They do not respond to me in any way.
In 2004, when my book The Looting of Social Security was published by New York publisher Carroll & Graf, I sent multiple copies to both organizations and tried very hard, without success, to find a contact person within each organization who would communicate with me. In desperation, I finally contacted a newly elected AARP board member privately and explained the problems that I was having with the leadership. He seemed dumbfounded by what I was reporting. He apologized for the behavior of other AARP officials. He agreed to read my book and engage in e-mail correspondence with me. I was elated, but my euphoria was short lived. I mailed him a copy of my book, and we did have a brief cordial e-mail correspondence. However, within a matter of weeks, I received a bizarre email message from him. He wrote:
“Dr. Smith, I choose not to have any further contact with you. May life be fair to both of us.”
I couldn’t understand how such a cordial relationship could end so abruptly and so mysteriously. I e-mailed the new director back repeatedly in an effort to get some explanation of what was going on. I even proposed that I travel to his city of residence and that we meet in a restaurant of his choosing so we could privately discuss what had happened that caused him to terminate contact with me without explanation. But he never responded to any of my e-mails, and I never heard from the gracious gentleman again. The only conclusion I could reach was that someone within the organization found out that he was corresponding with me and told him to terminate contact with me. I did not want to cause problems for the man so I just let the bizarre story end at that time. That was six years ago, and this is the first time that I have written publicly about the incident. I have chosen not to reveal the identify of the person, but it seems appropriate to at least reveal the incident at this time. I have had no contact with anyone at the AARP since 2004.
With regard to the NCPSSM, I personally believe that Barbara Kennelly is one of the most dedicated defenders of Social Security and that she wants to do what she thinks is best for the future of the program. That is why she was one of the first people to receive a review copy of my latest book, THE BIG LIE, How Our Government Hoodwinked the Public, Emptied the S.S. Trust Fund, and caused The Great Economic Collapse. I included a lengthy letter in which I tried to convince her that it was extremely important that the truth about the trust fund be made public. I requested that she allow me to come to Washington and meet with her and other leaders so I could personally make my case for exposing the Social Security fraud. I am sorry to report that she did not respond in any way. I sent her numerous e-mails and even tried to fax information to her. But I have heard nothing from her. I can only speculate on her motive for refusing to acknowledge the looting of Social Security. Her strategy for preventing privatization or any other kind of Social Security reform appears to be based on convincing the public that there is nothing wrong with Social Security. She has repeatedly claimed that Social Security was financially sound and that the trust fund contains enough assets to pay full Social Security benefits until 2037 with absolutely no changes. Of course, that is not true, and I think that she knows it is not true, but I can’t be sure. I don’t know how much training she has in the fields of economics and accounting, and it is possible that she still does not accept the notion that the government has spent all the Social Security trust fund money on other government programs.
In summary, I believe that it is crucial that both the AARP and the NCPSSM accept the truth about the trust fund, and report that truth to their members and the media. If leaders of either,or both, of these organizations actually doubt the fact that all the Social Security surplus money has been spent for non-Social Security purposes, then I invite them to debate me on the subject in any public forum of their choosing. I have been deeply immersed in researching Social Security funding for more than a decade, and I have published four books on the subject. I believe that I can convince anyone in a public forum that the government has spent the Social Security money.