What happens when Social Security redeems a Treasury Bond? Does that money come out of general revenues? Absolutely not. Treasury Bonds fund the debt. All that happens is that another Treasury bond is sold to keep the debt financed. Do you really think that the US Government could pay for that redeemed Treasury Bond out of general revenues? If they could, that would make the National Debt smaller.
Will the US default on Treasury Bonds? Those bonds are sold to grandmas and the Chinese and other countries and investors. Defaulting on Treasury Bonds that are backed by the "full faith and credit of the United States" would tank the US's credit rating and cause borrowing costs to skyrocket. Ain't gonna happen.
Those paper IOUs in the Trust Fund are Treasury Bonds, not worthless chits. Treasury Bonds are how the National Debt is financed. The fact that the Social Security Trust Fund bought some of them is irrelevant.
If you think Treasury Bonds are not real investments, then the whole $25 trillion National Debt is theft on a massive scale.
I don't know why Obama and company would assert that funds would come out of general revenues. That would mean balancing the budget by selling, you guessed it, Treasury Bonds to finance that extra expense.
Why people would claim that the US would default on Treasury Bonds? That's crazy. Unless they have an agenda. Unless they want Social Security defunded. Unless they wanted privatization and for people to have individual retirement accounts rather than retirement insurance. Private retirement accounts are subject to loss by fraud (think Bernie Madoff), theft (Leonard Cohen's manager stole all of his money and he had to go back to work in his 70's), bankruptcies (personal or corporate), and stock-market crashes. How many people lost their retirement savings in 2008? Yet, the financial sector would love privatization and to be making money off of all that retirement money no matter the risks.
Do you know how Mitt Romney made money? By buying companies and selling off assets, taking any cash assets, and saddling those companies with the debt for their own purchase. As long as those companies can limp along for another two years, it's all nice and legal. And do you know what some of those assets were? Company Pensions. They were sold to the underfunded Pension Benefit Guaranty Corporation. And suddenly the beneficiaries found their retirement payments cut in half. All part of vulture capitalism, nice and neat.
So don't tell me that private retirement accounts can replace Social Security, the most successful government program ever.
And how would privatization work? Were we to immediately disband Social Security, any disbursement of funds would fall far short of what people need. Plus, what happens to survivor's benefits and disability benefits? Social Security is insurance, and as such relies on a continuing revenue stream to keep it fully funded. Take away that funding (including the employer's half which is really just an employee's tax-exempt wages) and everyone except the rich is screwed.
Yes, the stock market crash under Bush in 2008 showed us just how much the rise in the stock markets was hot air. It also was predicted with the repeal of the Glass-Steagall Act in 1999 which had kept banking and investing activities separate. A crash was predicted to happen in 10 years. It happened in eight. The Frank-Dodd Act was supposed to reinstate the Glass-Steagall provisions, but most of the act was rendered useless by the GOP. Oh, well.
But go ahead and believe that the Trust Fund was stolen and that Social Security should be privatized. That's what the GOP is counting on.
Will the US default on Treasury Bonds? Those bonds are sold to grandmas and the Chinese and other countries and investors. Defaulting on Treasury Bonds that are backed by the "full faith and credit of the United States" would tank the US's credit rating and cause borrowing costs to skyrocket. Ain't gonna happen.
Those paper IOUs in the Trust Fund are Treasury Bonds, not worthless chits. Treasury Bonds are how the National Debt is financed. The fact that the Social Security Trust Fund bought some of them is irrelevant.
If you think Treasury Bonds are not real investments, then the whole $25 trillion National Debt is theft on a massive scale.
I don't know why Obama and company would assert that funds would come out of general revenues. That would mean balancing the budget by selling, you guessed it, Treasury Bonds to finance that extra expense.
Why people would claim that the US would default on Treasury Bonds? That's crazy. Unless they have an agenda. Unless they want Social Security defunded. Unless they wanted privatization and for people to have individual retirement accounts rather than retirement insurance. Private retirement accounts are subject to loss by fraud (think Bernie Madoff), theft (Leonard Cohen's manager stole all of his money and he had to go back to work in his 70's), bankruptcies (personal or corporate), and stock-market crashes. How many people lost their retirement savings in 2008? Yet, the financial sector would love privatization and to be making money off of all that retirement money no matter the risks.
Do you know how Mitt Romney made money? By buying companies and selling off assets, taking any cash assets, and saddling those companies with the debt for their own purchase. As long as those companies can limp along for another two years, it's all nice and legal. And do you know what some of those assets were? Company Pensions. They were sold to the underfunded Pension Benefit Guaranty Corporation. And suddenly the beneficiaries found their retirement payments cut in half. All part of vulture capitalism, nice and neat.
So don't tell me that private retirement accounts can replace Social Security, the most successful government program ever.
And how would privatization work? Were we to immediately disband Social Security, any disbursement of funds would fall far short of what people need. Plus, what happens to survivor's benefits and disability benefits? Social Security is insurance, and as such relies on a continuing revenue stream to keep it fully funded. Take away that funding (including the employer's half which is really just an employee's tax-exempt wages) and everyone except the rich is screwed.
Yes, the stock market crash under Bush in 2008 showed us just how much the rise in the stock markets was hot air. It also was predicted with the repeal of the Glass-Steagall Act in 1999 which had kept banking and investing activities separate. A crash was predicted to happen in 10 years. It happened in eight. The Frank-Dodd Act was supposed to reinstate the Glass-Steagall provisions, but most of the act was rendered useless by the GOP. Oh, well.
But go ahead and believe that the Trust Fund was stolen and that Social Security should be privatized. That's what the GOP is counting on.
