The Big Lie: How Our Government Hoodwinked The Public, Emptied the S.S. Trust Fund, and caused The Great Economic Collapse - Hardcover

Allen W. Smith; Ph.D.

Hardcover

ISBN 10: 097708518X ISBN 13: 9780977085187

Publisher: Ironwood Publications, 2009

Synopsis

The great economic collapse of 2008 started with the implosion of the American banking system, and then spread, like wildfire, throughout the entire global economy. What caused this colossal catastrophe? Answering that question is the purpose of this book. The collapse was not a natural disaster. It was manmade, and it should never have been allowed to happen. Reckless deficit spending by the federal government caused the national debt to skyrocket from only $1 trillion in 1981 to more than $11 trillion in 2009. During that same period, the government has borrowed, embezzled, or stolen every dollar of the approximately $2.4 trillion of Social Security surplus revenue that was supposed to have been saved and invested to fund the retirement of the baby-boomer generation. Another factor that contributed to the collapse was the repeal of the Glass-Steagall Act of 1933, a primary pillar of FDR s New Deal legislation that was designed to prevent a repeat of the 1930s financial collapse. When President Clinton signed into law the bill that repealed the Glass-Steagall Act, on November 12, 1999, he opened the floodgates for mass mergers of companies in the financial industries. This action contributed to the massive mismanagement on Wall Street that ultimately led to the meltdown. Smith chronicles the events during the past 28 years that collectively made the collapse almost inevitable.

About this title

About the Author:

Allen W. Smith has devoted much of his adult life to battling economic illiteracy and promoting economic education. He taught economics to college students for 30 years before retiring as Professor of Economics at Eastern Illinois University in 1998 to become a full-time writer. Over the years, Smith has written numerous books in his effort to help readers understand economics and government economic policy. Understanding Inflation and Unemployment, Smith s first book, became an alternate selection of Fortune Book Club when it was published in 1976. Understanding Economics, published by Random House in 1986, was used in more than 600 schools in 48 states. In recent years, Smith has focused his research and writing on government finance and Social Security. He published The Alleged Budget Surplus, Social Security, and Voodoo Economics in 2000, and The Looting of Social Security: How the Government is Draining America s Retirement Account in 2004. Dr. Smith has discussed economics and Social Security on national television, and he has been a guest on more than 170 radio talk shows. He holds a B.S. in Education degree from Ball State University and M.A. and Ph.D. degrees in economics from Indiana University.

Review:

Abysmal level of economics education is one of the biggest causes of economic meltdown, Allen W. Smith asserts in 'The Big Lie'…Smith calls himself "a voice crying in the wilderness" as he reflects on the causes and implications of the biggest economic crisis since the 1929 start of the worldwide Great Depression…While Smith blames most of the current economic meltdown on the supply-side, "trickle-down" economic policies of Ronald Reagan, George H.W. Bush and George W. Bush, he has plenty of scorn for Clinton's role in the demolition of one of the nation's best financial firewalls -- Glass-Steagall…"In 1999, Clinton cooperated with Congressional Republicans in repealing the Glass-Steagall Act of 1933, a primary pillar of FDR's New Deal legislation that was designed to prevent a repeat of the 1930s financial collapse," Smith writes. "Under the Glass-Steagall Act, banks, brokerage firms, and insurance companies were effectively barred from entering each others' industries, and investment banking and commercial banking was separated."..Smith: "The repeal of Glass-Steagall opened the floodgates for mass mergers of companies in the financial industries...with the stroke of the president's pen, investment firms like Merrill Lynch & Co. and banks like Bank of America Corp. are on the prowl for acquisitions." This came to pass, Smith writes, during the administration of George W. Bush and the 2008 financial collapse, but "the flood gates were opened when Clinton signed the 1999 repeal of the Glass-Steagall Act." Reviewed By David M. Kinchen Huntingtonnews.net Book Critic --David M. Kinchen Huntingtonnews.net Book Critic

The following review appeared in the February 2010 issue of CHOICE: 47-3291 Smith, Allen W. The big lie: how our government hoodwinked the public, emptied the S.S. Trust Fund, and caused the great economic collapse. Ironwood, 2009. 205p index ISBN 9780977085187, $21.95 Economist Smith (emer., Eastern Illinois Univ.) travels a well-worn path in this book, but it will be useful to keep the general public even more alert to the diversion of money from the Social Security Trust Fund to finance other government programs. The hard fact is that the US Treasury is siphoning every surplus dollar out of the trust fund and using the money for other purposes. Beyond this, the demographic fact is that the number of payers into Social Security will inevitably diminish as a percentage of retirees; fewer payers, of course, means that deficits are inevitable. Smith discusses the US Treasury s provision of special-issue bonds to finance the coming deficits as merely a bookkeeping maneuver because the bonds inevitably will add to the deficits when they mature. In any form, such deficits will be passed on to future generations. Smith provides interesting information about how deficits began to emerge and enlarge under various administrations; this information will be quite useful for policy makers. However, the major threats of expanding budgets will come from sources other than Social Security, namely health care and Medicare trust funds, whose impact on US budget deficits will be far greater. Summing Up: Recommended. General readers and policy makers. H. I. Liebling, emeritus, Lafayette College --CHOICE, February 2010

About this edition

• Publisher: Ironwood Publications
• Publication date: 2009
• ISBN 10: 097708518X
• ISBN 13: 9780977085187
• Binding: Hardcover
• Edition number: 1
• Number of pages: 208