Economist and author Allen W. Smith, Ph.D. has issued the following statement about the IOUs held by the Social Security trust fund: Most people seem to think the trust fund contains a large reserve of real assets that can be used to supplement payroll tax revenue when Social Security begins running annual deficits in 2018. It is supposed to contain $1.5 trillion in marketable Treasury bonds -- purchased with tax dollars paid in by baby boomers to pre-fund their own retirement. However, every penny of the $1.5 trillion has been 'borrowed' (looted) by the government, and the baby boomers are now being made scapegoats to cover up the fraud. To facilitate this looting, the Treasury Department quietly stopped issuing marketable Treasury bonds to the Social Security trust fund -- a fact that few people know about -- before the large surpluses from the 1983 payroll tax increase began to flow in. From that point on, the Treasury issued only 'special issue' non-marketable bonds to the trust fund. These special issues were created for the government trust funds only, and they are not at all like the regular marketable Treasury bonds held by private investors. They are not marketable, they have no cash value, and they are not real assets. When Social Security begins to run deficits in 2018, the American people will be at the mercy of a greedy government that must begin repaying the money it has 'borrowed' if full benefits are to be paid. In order to do so, the government will have to raise taxes or borrow massive additional amounts from the public, because there is nothing of value in the trust fund with which to raise cash. The American people must demand that Bush immediately stop looting the more than $400 million per day of Social Security surplus money, and allow that money to be invested in marketable Treasury bonds. Secondly, we must demand that legislation be enacted requiring that the $1.5 trillion of Social Security surplus that has already been looted be repaid and invested in marketable Treasury bonds. If these two steps are taken, there will be no Social Security problem until at least 2042.
In other words, the government has created the very same so-called liquidity "crisis" it is using to justify its proposal to effectively drive the system into extinction. "Hey, they killed Social Security!" "You bastards!"
Runner-up press release of the week: Go Nuts and Follow the New 2005 Dietary Guidelines: Advice From the International Tree Nut Council Nutrition Research & Education Foundation. I plan to leave my entire estate to the Tree Nut Council when I go, along with a bequest to good old Pomona College--named for "the goddess of fruits and nuts," as the old president used to quip.