Into current payments and our debt

Post #182,912 by ben_tilly 11/4/04 6:43:06 PM Reply	Into current payments and our debt Theoretically Social Security is "pay as you go". In fact it is putting away money which is "invested" in US treasuries. The result is that we can run up debt faster without having to convince anyone that buying our bonds is a good idea. Which means that when time comes to pay out, the US government has to pay back that debt to Social Security, which the US government shows no signs that it will be able to do. Furthermore, even if you believe that these "investments" are good, there is a massive shortfall in Social Security looming. Back when Paul Rubin was head of the Treasury, he and Allan Greenspan agreed that, based on then-current figures, the optimal implementation of Bush's plan was to opt-out people below 37 into the new approach (they could expect more) and then government would have to fund the 1 trillion projected shortfall in Social Security. I strongly sense that Bush does not wish to find that trillion dollars, and he doesn't like the idea of leaving current Social Security as a government program which lasts for decades more (until the people who are now 37 or older die off). Furthermore he is well aware that he can just supply an optimistic estimate for growth between now and when people retire, come up with a plan that will only work if his estimate holds, and then it is someone else's problem when it breaks. Those beliefs are why I do not trust Bush's planning. Cheers, Ben I have come to believe that idealism without discipline is a quick road to disaster, while discipline without idealism is pointless. -- Aaron Ward (my brother)
Post #182,921 by bepatient 11/4/04 7:02:56 PM Reply	Re: Into current payments and our debt Which takes it full cycle back into the economy. No gold sitting around nor stored value. So, whether the government puts it in there or we do ourselves...it ends up back in the economy. Nothin like government using rosy forecasts to paint a pretty picture is there? Lovely while it lasts though...like that lofty surplus. That lack of faith should be universal. If you push something hard enough, it will fall over. _{Fudd's First Law of Opposition} [link\|mailto:bepatient@aol.com\|BePatient]
Post #182,953 by ben_tilly 11/4/04 9:35:19 PM Reply	Only sort of Just over half of US government debt is in foreign hands at this point. About 22% of the US government debt is owed to Social Security. If we regard the Social Security debt as a polite bookkeeping convention (I do) then (after some math), about 2/3 of our actual government debt is in foreign hands. (50/78 = 0.6510...) And we are obligated to generate over 1.6 trillion for Social Security, on top of everything else we are over-obligated for. The interest payment on all of this debt is the third largest line item on the budget. (After the military and entitlement programs.) It is spent in a way that I do not want my tax dollars spent. Of course the money borrowed with this debt goes into government services and thus into the economy. But spending now in return for moving money out later is not always a good idea. We are therefore obligating ourselves to move large (and increasing!) amounts of money from our economy to other economies. Which sustains us for now, but eventually...? Cheers, Ben I have come to believe that idealism without discipline is a quick road to disaster, while discipline without idealism is pointless. -- Aaron Ward (my brother)

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