If you recognize the name Allen Smith, you likely have a picture in your mind of a kind and thoughtful man who does his best to spread a positive attitude through his column, Contemplating Life. He has an alter ego, though, and for it has been termed alternately courageous and crazy.
While doing research for a book more than 10 years ago, Mr. Smith, a retired professor of economics, discovered what he calls “The Great Social Security Scam,” namely that for the past quarter century, the federal government has “diverted all Social Security surplus revenue to the general fund, and the money has been spent on wars and other government programs. At the same time the government was doing this, it misled the public into believing the money was being invested in real, marketable Treasury bonds.”
Mr. Smith notes that, “From 1935 to 1983, Social Security operated on a strictly ‘pay as you go’ basis. Each generation paid for the benefits of the preceding generation. But the 1982 Greenspan Commission on Social Security Reform foresaw problems when the baby boomers began to retire in about 2010. The boomers, the largest generation in American history, would threaten the solvency of the program unless actions were taken to ‘fix’ the problems. They recommended that the boomers be required to pay enough additional taxes to prepay the cost of their own benefits, as well as paying for the costs of their parents’ generation. The boomers were hit with a double whammy, and they have paid more into Social Security than any other generation. The 1983 payroll tax hike has generated $2.6 trillion in surplus revenue, which was supposed to be saved and invested to build up a large reserve in the trust fund. If that had been done, there would be enough in the trust fund to pay full benefits until 2037, when the oldest of the boomers would be 91 years old.”
The scam began when the first surplus revenue was received by the Treasury in 1985, and has continued since that time. “The fact is that $2.54 trillion of the Social Security surplus revenue has been diverted from the Social Security program and used for whatever unscrupulous politicians chose to spend it on,” says Mr. Smith. “None of this money was saved or invested in anything. Money can be spent or saved. If it is saved, it can also be invested, but if it is all spent, there is nothing left to invest. This $2.54 trillion Social Security heist by the United States government may well be the fraud of the century!”
Mr. Smith has spent the past decade and more than $30,000 trying to get this information to the American public, but he has been thwarted at most every turn. His book “The Looting of Social Security” was published in 2004, but soon mysteriously disappeared from bookstores nationwide and was listed as “unavailable” on Amazon.com. He asked his publisher to revert the rights to the book back to him, but it took a four-year fight to make it happen. His posts on the subject have been removed from several blogs and he has become persona non grata on those blogs, though I can tell you from personal experience that Mr. Smith is never less than gracious and civil in his communications. His is a story that those in power apparently do not want told.
Should you be tempted to brand Mr. Smith a kook and move on, or to think that he and I are conspiracy nuts, take a look at the following information provided by the professor.
“A few members of Congress expressed their rage in the early years, and Senator (Daniel Patrick) Moynihan of New York even introduced legislation to repeal the 1983 tax hike so there would be no money to loot.
“Senator Ernest Hollings of South Carolina, in a speech on the Senate floor on Oct. 13, 1989, issued the following warning: ‘…the most reprehensible fraud in this great jambalaya of frauds is the systematic and total ransacking of the Social Security trust fund…in the next century…the American people will wake up to the reality that those IOUs in the trust fund vault are a 21st century version of Confederate bank notes.’
“On Jan. 21, 2005, David Walker, Comptroller General of the GAO (U.S. Government Accountability Office), tried to remove any lingering doubt about the trust fund holdings. He said, ‘There are no stocks or bonds or real estate in the trust fund. It holds nothing of real value to draw down.’”
A Feb. 21 column in USA Today titled “Fix Social Security Sooner, Not Later,” has brought Mr. Smith some hope. It validates his message of the past ten years and, as he says, will make it hard for the powers that be to “get the genie back in the bottle.”
As tough as his battle has been, though, that may be the easy part. The Social Security program must be fixed. The debt the U.S. government has to Social Security is every bit as real as the debts it claims, and they must all be repaid if we hope to have a better future. I hope you will add your voice to those calling for this as a priority.
