Focus

Will Social Security
2015?
Be in the Mail
For many baby boomers, it’s comforting to believe
that part of the 12.4 percent Social Security payroll
tax they (or they and their employer) have been
paying is going into a $2.7 trillion Social Security
Trust Fund designed specifically to ensure the tidal
wave of boomers now retiring will be assured their
benefits.
For those already on Social Security, the taxes they
pay on a portion of their benefits has also been
earmarked for the fund since 1983.
Economist and former professor Allen W. Smith,
however, says there is no trust fund – and a number
of elected officials, including former President
George W. Bush, have acknowledged that.
“To make a long story very short, we are supposed
to have $2.7 trillion in Social Security surplus, all
earmarked for the baby boomers’ retirement, due
to money generated by amendments approved in
1983,” says Smith, who has researched the topic
for 15 years and is author of several books, including
“The Looting of Social Security” and “Ronald
Reagan and the Great Social Security Heist,”.
“But there’s no money in the fund.”
Where did it go? Four administrations, from Reagan
to George W. Bush, spent it on myriad non-Social
Security efforts.
“Obama didn’t have a chance to use it – it was
gone,” Smith says.
The 1983 amendments approved under Reagan
generated revenue by accelerating Social Security
payroll tax increases, allowing a portion of benefits
to be taxed, and delaying cost-of-living adjustments
from June to December.
According to the Social Security Administration
website: “The surpluses are invested in (and the
trust fund holds) special-issue Treasury bonds.”
But what’s actually sitting in the Trust Fund is nonmarketable
government IOUs – worthless, Smith
says.
By Ginny Grimsley
The fact has been publicly acknowledged by a
2009 Social Security trustees report; Sen. Tom Coburn;
and President George W. Bush, who in 2005
said, “There is no trust fund, just IOUs that I saw
firsthand … future generations will pay – pay for
either in higher taxes or reduced benefits or cuts to
other critical government programs.”
Recently, Speaker of the House John Boehner offered
a sobering statement on ABC’s “This Week,”
on Oct. 6, 2013: “…Ten thousand baby boomers
like me (are) retiring every single day – 70,000 this
week; 3.5 million this year. And, it’s not like there’s
money in Social Security or Medicare. The government,
over the last 30 years, have spent it all.”
Smith examines what needs to happen starting
today.
• Get the secret out. The total cost of paying
full benefits in 2010 exceeded Social Security
tax revenue by $49 billion, and the gap between
revenue and costs will become larger in the coming
years. “On Sept. 27, 2000, I appeared on CNN
Today to discuss my book, ‘The Alleged Budget
Surplus, Social Security, and Voodoo Economics;’
the host did not take me seriously and asked me
if I was ‘a voice crying in the wilderness,’ ” Smith
says. “I’d quickly realized that he was right, with
the exception of multiple statements by politicians
and officials.”
• Get the AARP, NCPSSM and the media involved.
The only way the government was able
to pay full benefits in 2010 was to borrow billions
from China, among other creditors. The public is
repeatedly being told by government officials and
leaders from the AARP and the National Committee
to Preserve Social Security and Medicare that the
trust fund has enough money pay full benefits until
2033. “I have tried engaging the leaders of these
organizations with my research, but my attempts
have been unsuccessful,” Smith says.
• Get the baby boomers engaged in protesting
once again. Boomers are no strangers to
taking to the streets to express their outrage. However,
“I’m beginning to think that it’s going to take
missed checks before the public gets raises their
voices. Unfortunately, you just don’t know what you
have until it’s gone.”
www.thebiglie.net
FOCUS of SWFL 2014 77