# Bush: There is No Trust! **URL:** \ **Category:** The BBQ Pit\ **Created:** [February 10, 2005, 3:28am UTC](https://boards.straightdope.com/t/bush-there-is-no-trust/289334 "2005-02-10T03:28:12Z")\ **Posts on this page:** 20\ **Page:** 9
**Author:** ![Polycarp](https://avatars.discourse-cdn.com/v4/letter/p/82dd89/32.png) [@Polycarp](https://boards.straightdope.com/u/Polycarp)\ **Post date:** [February 21, 2005, 1:21pm UTC](https://boards.straightdope.com/t/bush-there-is-no-trust/289334/161 "2005-02-21T13:21:18Z")
> [@Scylla](#): > > To be sure I understand your objection, let me attempt to rephrase it, and you can tell me if this is accurate. > > You are suggesting that the the trustees of the SS trust funds have a specific fiduciary responsibility to SS benificiaries? > > You are further suggesting that this distinguishes it from the Federal Government in that the Federal Government does not share this obligation? > > Right. This would be an example of how the Government is one entity. It wouldn’t have mattered whether the money going to the Contras came from the Dept of Agriculture, the Defense Dept, or the Dept. of the interior. It cannot borrow from Peter to pay Paul since it is both Peter and Paul. > > You cannot loan money to yourself. There is therefore no loan. > > I’m not trying to explain it way. I’m trying to explain how the government explained it. They **did** commingle the funds. > > Please. Argue. > > Is this a reasonable summary of your current objection: > > Not so fast, **Scylla.** I am really not so concerned with the interior financial manipulations of the government. If as you say, it is a single entity, than by taking my, and everybody else’s money to a given purpose it is than obligated to fulfill that purpose. It doesn’t really matter whether the trust funds hold an asset, or an obligation or what have you. What matters is that the government is keeping track of this obligation so that it may fulfill it and demonstrate that it has fulfilled it. As long as they do this than I don’t care whether the checks come from the General Fund, the SS trust funds, or the Department of the Interior. Is that it? [/QUOTE] Very, very close to it. I do acknowledge that SSA is a tax/stipend system, not a pension fund, and that “entitlements” to it are in that nebulous category that says, if the government decides to do X, it must do it fairly and non-discriminatorily. I am equally “entitled” to SS payments as Paul Ignaciewicz of Pittsburgh, or Magnolia Washington of Tuscaloosa, or Harry Wong of Seattle, who worked and paid SS tax the same length of time as I did, no more and no less. Benefits may be increased, reduced, cut entirely – but must be done fairly and across the board in accordance with a sensible formula. Given that, though, yes, I believe that there is a **moral** obligation to pay out such benefits, at least to those who have been led by the government to believe that such benefits will be available at their retirement. In keeping with that, there is an obligation on the part of the government to honor its interior, bookkeeping commitments, and repay funds to that part of the Federal coffers from which such benefits are paid out. It would seem to me that there are some reasonable solutions to this alleged crisis, if examined dispassionately and without partisan fervor, which permit the government to do exactly what is purports to be wanting to do. ---
**Author:** ![Hentor\_the\_Barbarian](https://avatars.discourse-cdn.com/v4/letter/h/8edcca/32.png) [@Hentor\_the\_Barbarian](https://boards.straightdope.com/u/Hentor_the_Barbarian)\ **Post date:** [February 21, 2005, 1:22pm UTC](https://boards.straightdope.com/t/bush-there-is-no-trust/289334/162 "2005-02-21T13:22:19Z")
[http://www.philly.com/mld/inquirer/news/nation/10671774.htm?1c](http://www.philly.com/mld/inquirer/news/nation/10671774.htm?1c) > [@](#): > > So do the bonds in it have any financial value? > For all the rhetorical obfuscation in the Social Security debate, there is little dispute among experts over some basic aspects of the trust fund. > They agree that the fund has real value, if only because the government says it does, and that it carries a real price. > In a report last year, the Congressional Budget Office called the trust fund mainly an “accounting mechanism” that contains “no economic resources.” It described the bonds as legal commitments to pay, as opposed to the ability to do so. All of which has been said by other agencies in other years. > Yet those commitments are of great significance, even if they do represent promises (IOUs) made by one part of the government to another. Such commitments are the basis on which all government securities are issued. Not to honor the pledges would amount to default. > “Has the United States ever defaulted on its obligations? I don’t think so,” said Mark Weisbrot, codirector of the liberal, Washington-based Center for Economic and Policy Research. “Those bonds are as real as the ones held by Bill Gates and the government of China. Not to pay them would be robbery.” > **[Bush says there is no SS Trust Fund - let's call his bluff!](https://www.dailykos.com/stories/2005/2/10/91540/-)** > > Bush shows his hand, finally - 02/09/05 > > George W. Bush has now revealed his true plan for > destroying Social Security - by defaulting on the Trust > Funds. > > Bush said yesterday, outrigh... > [@](#): > > What does it say on those pieces of paper? > According to US law (42 USC 401 (d) (2)), each of those pieces of paper has printed on it words that confer a most solemn and utterly unavoidable obligation on the part of the US Government: > “The purposes for which obligations of the United States may be issued under Chapter 31 of Title 31 are hereby extended to authorize the issuance at par of public-debt obligations for purchase by the Trust Funds. > … > Each obligation issued for purchase by the Trust Funds under this subsection shall be evidenced by a paper instrument in the form of a bond, note, or certificate of indebtedness issued by the Secretary of the Treasury setting forth the principal amount, date of maturity, and interest rate of the obligation, and stating on its face that the obligation shall be incontestable in the hands of the Trust Fund to which it is issued, that the obligation is supported by the full faith and credit of the United States, and that the United States is pledged to the payment of the obligation with respect to both principal and interest.” And why do pro-defaulters support the unprecedented action of defaulting on our financial responsibilities? Here’s how the effects of defaulting would be felt among different classes of Americans: [http://www.cepr.net/Social\_Security/defaulting\_ss.htm](http://www.cepr.net/Social_Security/defaulting_ss.htm) > [@](#): > > 95 percent of households would be net losers if the Federal government defaults on its debt to Social Security. > • if the default takes place in 2002, it would lead to a net transfer of nearly $370 billion from households in the bottom 95 percent of the income distribution to the households in the top 5 percent. > • the richest 1 percent households would have a net gain of more than $270 billion > • the net loss from default to households in the bottom four quintiles would be equal to approximately 10 percent of a year’s income > • the gains to the richest 1 percent would average more than $300,000 per household > The upward redistribution from a default increases if the trust fund is allowed to continue to accumulate bonds prior to the default. If the default were to take place in 2016: > • more than $1 trillion (in 2001 dollars) would be transferred from the bottom four quintiles to the households in the top 5 percent of the income distribution, > • the bottom four quintiles would lose on net an amount equal to more than 20 percent of their annual income, > • an average household in the top 1 percent of the distribution would have a net gain of more than $730,000. ---
**Author:** ![Liberal](https://avatars.discourse-cdn.com/v4/letter/l/848f3c/32.png) [@Liberal](https://boards.straightdope.com/u/Liberal)\ **Post date:** [February 21, 2005, 1:54pm UTC](https://boards.straightdope.com/t/bush-there-is-no-trust/289334/163 "2005-02-21T13:54:26Z")
I don’t know what [Philly.com](http://Philly.com) is. A newspaper, I guess. But putting in the same paragraph that the bonds have real value if only because the bond-holder-and-issuer says so, and that its own administrator says they are backed by no economic resources but are accounting techniques only, and not honoring them would be a default — it seems to me that the writer doesn’t see the elephant in his own article. The SSA itself says that if you’re 25 today, you can expect your benefits to decrease by 27% when you reach 63, and more each year thereafter. > **[tr04.pdf](https://www.ssa.gov/OACT/TR/TR04/tr04.pdf)** > > 1480.28 KB If they can devalue them at will, what’s the difference between that and defaulting? ---
**Author:** ![Hentor\_the\_Barbarian](https://avatars.discourse-cdn.com/v4/letter/h/8edcca/32.png) [@Hentor\_the\_Barbarian](https://boards.straightdope.com/u/Hentor_the_Barbarian)\ **Post date:** [February 21, 2005, 2:04pm UTC](https://boards.straightdope.com/t/bush-there-is-no-trust/289334/164 "2005-02-21T14:04:58Z")
> [@Liberal](#): > > If they can devalue them at will, what’s the difference between that and defaulting? You’re talking about two different things - the trust fund (already in existence) and estimated future benefits (an estimate of the future). That’s probably the key difference there. ---
**Author:** ![Scylla](https://avatars.discourse-cdn.com/v4/letter/s/a5b964/32.png) [@Scylla](https://boards.straightdope.com/u/Scylla)\ **Post date:** [February 21, 2005, 2:07pm UTC](https://boards.straightdope.com/t/bush-there-is-no-trust/289334/165 "2005-02-21T14:07:47Z")
[QUOTE=Desmostylus] Maybe I have misinterpreted your argument, **Scylla**. What do you think of this restatement: > [@](#): > > d) The people on this messge board are fools, No. Not even you. You would have to improve yourself manyfold to qualify as “fool.” A fool can be a nice guy. A fool can learn. A fool can stop being a fool. You are mean, stupid, and ignorant and you work hard to stay that way as its bascially the cornerstone of your being. ---
**Author:** ![Scylla](https://avatars.discourse-cdn.com/v4/letter/s/a5b964/32.png) [@Scylla](https://boards.straightdope.com/u/Scylla)\ **Post date:** [February 21, 2005, 2:12pm UTC](https://boards.straightdope.com/t/bush-there-is-no-trust/289334/166 "2005-02-21T14:12:56Z")
> [@Polycarp](#): > > Is that it? Very, very close to it. I do acknowledge that SSA is a tax/stipend system, not a pension fund, and that “entitlements” to it are in that nebulous category that says, if the government decides to do X, it must do it fairly and non-discriminatorily. I am equally “entitled” to SS payments as Paul Ignaciewicz of Pittsburgh, or Magnolia Washington of Tuscaloosa, or Harry Wong of Seattle, who worked and paid SS tax the same length of time as I did, no more and no less. Benefits may be increased, reduced, cut entirely – but must be done fairly and across the board in accordance with a sensible formula. [/quote] I agree. > [@](#): > > Given that, though, yes, I believe that there is a **moral** obligation to pay out such benefits, at least to those who have been led by the government to believe that such benefits will be available at their retirement. In keeping with that, there is an obligation on the part of the government to honor its interior, bookkeeping commitments, and repay funds to that part of the Federal coffers from which such benefits are paid out. I agree as well. > [@](#): > > It would seem to me that there are some reasonable solutions to this alleged crisis, if examined dispassionately and without partisan fervor, which permit the government to do exactly what is purports to be wanting to do. Maybe. I really don’t know ---
**Author:** ![Scylla](https://avatars.discourse-cdn.com/v4/letter/s/a5b964/32.png) [@Scylla](https://boards.straightdope.com/u/Scylla)\ **Post date:** [February 21, 2005, 2:39pm UTC](https://boards.straightdope.com/t/bush-there-is-no-trust/289334/167 "2005-02-21T14:39:02Z")
> [@Hentor the Barbarian](#): > > You’re talking about two different things - the trust fund (already in existence) and estimated future benefits (an estimate of the future). > > That’s probably the key difference there. **Hentor** I’ve read your link excerpts and I see that Lib has come forth with the same rebuttal that we’ve been through several times before. Instead of beating my head against the wall by restating it again, let me take another tact. Bear with me a moment and see if we can make a consensus. I have absolutely no doubt that the government will embark on a course of action that does not involve a default on the trust fund obligations. None at all. There is no conceivable reason why they should ever declare a default. They can tax more, print more money, rollover the bonds, cut benefits, or a combination of the above and declare the obligations fulfilled. This is not the issue. Really, all this crap about whether or not the trust funds get fulfilled is just crap. It really doesn’t matter since it’s all an accounting fiction. As **Polycarp** has grasped the real issue here is the **moral** obligation. The government by creating this program and taking our money to the purpose has obligated itself to fulfill the purpose. If they simply print more money so that the payments are made but inflation makes them meaningless, than they have failed that purpose. If they simply tax like hell to make good on everything that is also failure. If they cut the benefits so that people starve who were counting on it, that is also failure. The obligation here that we are talking about is a government’s obligation to fulfill a societal expectation that has come to be depended upon. The problem is that the program, from inception, has been managed so poorly and irresponsibly that whether or not this is possible is a real cause for concern. Screw the trust funds. Whether or not the obligations are declared met or not has no bearing whatsoever on whether or not the program will fulfill its obligations. This is largely why it is an accounting fiction. It is a construction to promote the appearance of solvency and responsible management in the absence of both those qualities. The point that we are trying to make here is that an internal loan is a distinction without meaning. It’s a wash. For example, if you hold your own mortgage that mortgage is paid. You cannot write off the interest and you don’t earn any interest. Try this on your taxes sometime and see whether or not the government agrees with me. ---
**Author:** ![Desmostylus](https://avatars.discourse-cdn.com/v4/letter/d/c57346/32.png) [@Desmostylus](https://boards.straightdope.com/u/Desmostylus)\ **Post date:** [February 22, 2005, 12:31pm UTC](https://boards.straightdope.com/t/bush-there-is-no-trust/289334/168 "2005-02-22T12:31:57Z")
I’ll see if I can tranlate **Scylla** ’s post into comprehensible terms: > [@Scylla](#): > > **Hentor** I’ve read your link excerpts and I see that Lib has come forth with the same rebuttal that we’ve been through several times before. > > Instead of beating my head against the wall by restating it again, let me take another tact. Bear with me a moment and see if we can make a consensus. I’m a reasonable man. Forget my past behaviour as a lying con-artist. I’ve reformed. As of yesterday. Or maybe tomorrow. But I promise that at some point, I won’t stab you in the back. > [@](#): > > I have absolutely no doubt that the government will embark on a course of action that does not involve a default on the trust fund obligations. > > None at all. I just got the latest Pubbie talking points. Seems that the “there is no trust” stuff isn’t going over very well. > [@](#): > > There is no conceivable reason why they should ever declare a default. They can tax more, print more money, rollover the bonds, cut benefits, or a combination of the above and declare the obligations fulfilled. > > This is not the issue. We, the pubbies, can pretend to believe, when we want to, in higher taxes, and greater inflation. And we can slip things in like “cut benefits”, whilst hoping that you won’t notice that cutting benefits is pretty much the same thing as defaulting on the trust. > [@](#): > > Really, all this crap about whether or not the trust funds get fulfilled is just crap. It really doesn’t matter since it’s all an accounting fiction. As **Polycarp** has grasped the real issue here is the **moral** obligation. As we all know, the Pubbies are the moral party. The pubbies can be trusted when they say things like “Saddam has WMDs”, and “we have a moral obligation to repay those taxes you thought were going into some sort of trust that doesn’t technically exist”. > [@Scylla](#): > > The government by creating this program and taking our money to the purpose has obligated itself to fulfill the purpose. If they simply print more money so that the payments are made but inflation makes them meaningless, than they have failed that purpose. If they simply tax like hell to make good on everything that is also failure. If they cut the benefits so that people starve who were counting on it, that is also failure. The government really, really, would _like_ to make good on the trust, but it can’t. You guys are just shit out of luck. You got ripped off. Ha ha. > [@Scylla](#): > > The obligation here that we are talking about is a government’s obligation to fulfill a societal expectation that has come to be depended upon. > > The problem is that the program, from inception, has been managed so poorly and irresponsibly that whether or not this is possible is a real cause for concern. It isn’t Dubya’s fault. It was Clinton. Bush daddy and Raygun had nothing to do with it. Welfare moms need discipline. > [@Scylla](#): > > Screw the trust funds. Whether or not the obligations are declared met or not has no bearing whatsoever on whether or not the program will fulfill its obligations. This is largely why it is an accounting fiction. I’m making up some sort of shit. > [@Scylla](#): > > It is a construction to promote the appearance of solvency and responsible management in the absence of both those qualities. We, the pubbie ruling class, like to create some sort of appearance of responsible management, whilst sucking money out of your pockets into ours. > [@Scylla](#): > > The point that we are trying to make here is that an internal loan is a distinction without meaning. It’s a wash. For example, if you hold your own mortgage that mortgage is paid. You cannot write off the interest and you don’t earn any interest. Try this on your taxes sometime and see whether or not the government agrees with me. The point that we, the pubbie ruling class are trying to make, is that it’s _our_ money. Not yours. ---
**Author:** ![Desmostylus](https://avatars.discourse-cdn.com/v4/letter/d/c57346/32.png) [@Desmostylus](https://boards.straightdope.com/u/Desmostylus)\ **Post date:** [February 22, 2005, 12:45pm UTC](https://boards.straightdope.com/t/bush-there-is-no-trust/289334/169 "2005-02-22T12:45:55Z")
I think I left something out of the translation above: I, **Scylla** , despite obviously _not_ belonging to the real pubbie ruling class, try to pretend that I do, in the hope that some crumbs may be flung my way. ---
**Author:** ![Liberal](https://avatars.discourse-cdn.com/v4/letter/l/848f3c/32.png) [@Liberal](https://boards.straightdope.com/u/Liberal)\ **Post date:** [February 22, 2005, 12:48pm UTC](https://boards.straightdope.com/t/bush-there-is-no-trust/289334/170 "2005-02-22T12:48:05Z")
> [@Desmostylus](#): > > I’ll see if I can tranlate **Scylla** ’s post into comprehensible terms: And now you know you can’t. I don’t know how Scylla’s opponents on this issue feel about it, but if I were one of them, I sure as heck wouldn’t want you on my side. You’re just a disaster for their case. “There’s nothing I like less than bad arguments for a view that I hold dear.” — Daniel Dennett ---
**Author:** ![Desmostylus](https://avatars.discourse-cdn.com/v4/letter/d/c57346/32.png) [@Desmostylus](https://boards.straightdope.com/u/Desmostylus)\ **Post date:** [February 22, 2005, 12:56pm UTC](https://boards.straightdope.com/t/bush-there-is-no-trust/289334/171 "2005-02-22T12:56:23Z")
> [@Liberal](#): > > And now you know you can’t. I don’t know how Scylla’s opponents on this issue feel about it, but if I were one of them, I sure as heck wouldn’t want you on my side. You’re just a disaster for their case. > > “There’s nothing I like less than bad arguments for a view that I hold dear.” — Daniel Dennett You _aren’t_ one of **Scylla** ’s opponents. You _do not_ know how **Scylla** ’s opponents feel. You _cannot_ speak for them. :rolleyes: ---
**Author:** ![Liberal](https://avatars.discourse-cdn.com/v4/letter/l/848f3c/32.png) [@Liberal](https://boards.straightdope.com/u/Liberal)\ **Post date:** [February 22, 2005, 12:58pm UTC](https://boards.straightdope.com/t/bush-there-is-no-trust/289334/172 "2005-02-22T12:58:38Z")
> [@Desmostylus](#): > > You _aren’t_ one of **Scylla** ’s opponents. You _do not_ know how **Scylla** ’s opponents feel. You _cannot_ speak for them. :rolleyes: I think I said that. Once again, I remind you of the subjunctive mode. ---
**Author:** ![Desmostylus](https://avatars.discourse-cdn.com/v4/letter/d/c57346/32.png) [@Desmostylus](https://boards.straightdope.com/u/Desmostylus)\ **Post date:** [February 22, 2005, 12:59pm UTC](https://boards.straightdope.com/t/bush-there-is-no-trust/289334/173 "2005-02-22T12:59:55Z")
And, as I think I’ve made clear, this isn’t about **Scylla** anyway. He’s just a pubbie tool. ---
**Author:** ![Desmostylus](https://avatars.discourse-cdn.com/v4/letter/d/c57346/32.png) [@Desmostylus](https://boards.straightdope.com/u/Desmostylus)\ **Post date:** [February 22, 2005, 1:04pm UTC](https://boards.straightdope.com/t/bush-there-is-no-trust/289334/174 "2005-02-22T13:04:52Z")
> [@Liberal](#): > > I think I said that. Once again, I remind you of the subjunctive mode. Said what exactly? You’ve said lots of shit. Hardly any of it makes any sense. ---
**Author:** ![Liberal](https://avatars.discourse-cdn.com/v4/letter/l/848f3c/32.png) [@Liberal](https://boards.straightdope.com/u/Liberal)\ **Post date:** [February 22, 2005, 1:04pm UTC](https://boards.straightdope.com/t/bush-there-is-no-trust/289334/175 "2005-02-22T13:04:54Z")
> [@Desmostylus](#): > > And, as I think I’ve made clear, this isn’t about **Scylla** anyway. He’s just a pubbie tool. Then why have you made it all about Scylla? You’ve hounded him this entire thread, attacking his education, mocking his credentials, and even pretending to stand in his place and speak on his behalf — using first person pronouns to boot. If you’re drunk or something, just let us know. ---
**Author:** ![Liberal](https://avatars.discourse-cdn.com/v4/letter/l/848f3c/32.png) [@Liberal](https://boards.straightdope.com/u/Liberal)\ **Post date:** [February 22, 2005, 1:08pm UTC](https://boards.straightdope.com/t/bush-there-is-no-trust/289334/176 "2005-02-22T13:08:01Z")
> [@Desmostylus](#): > > Said what exactly? You’ve said lots of shit. Hardly any of it makes any sense. [Subjunctive](http://www.bartleby.com/64/C001/061.html). ---
**Author:** ![Desmostylus](https://avatars.discourse-cdn.com/v4/letter/d/c57346/32.png) [@Desmostylus](https://boards.straightdope.com/u/Desmostylus)\ **Post date:** [February 22, 2005, 1:12pm UTC](https://boards.straightdope.com/t/bush-there-is-no-trust/289334/177 "2005-02-22T13:12:47Z")
I see the problem. If you’d said “If I, **Lib** had any fucking idea what I was talking about, I’d say: blah blah blah” I object that you don’t, in fact, have any fucking idea what you’re talking about. Your response is “Waa! Subjunctive!”. ---
**Author:** ![Liberal](https://avatars.discourse-cdn.com/v4/letter/l/848f3c/32.png) [@Liberal](https://boards.straightdope.com/u/Liberal)\ **Post date:** [February 22, 2005, 1:25pm UTC](https://boards.straightdope.com/t/bush-there-is-no-trust/289334/178 "2005-02-22T13:25:05Z")
Okay, well, let the reader decide. […shrug…] ---
**Author:** ![Desmostylus](https://avatars.discourse-cdn.com/v4/letter/d/c57346/32.png) [@Desmostylus](https://boards.straightdope.com/u/Desmostylus)\ **Post date:** [February 22, 2005, 1:34pm UTC](https://boards.straightdope.com/t/bush-there-is-no-trust/289334/179 "2005-02-22T13:34:22Z")
> [@Liberal](#): > > Okay, well, let the reader decide. […shrug…] And let’s also allow the reader to decide upon this other thread, in which you’re also making a complete asshole of yourself: [How is this not in violation of Great Debates?](http://boards.straightdope.com/sdmb/showthread.php?t=302947) Just leave the SDMB. You’d be better off. The rest of us would be better off, too. It’s sad, but it’s come to that point. ---
**Author:** ![Weirddave](https://avatars.discourse-cdn.com/v4/letter/w/919ad9/32.png) [@Weirddave](https://boards.straightdope.com/u/Weirddave)\ **Post date:** [February 22, 2005, 2:08pm UTC](https://boards.straightdope.com/t/bush-there-is-no-trust/289334/180 "2005-02-22T14:08:18Z")
**Desmostylus** , So, first you attack Scylla (in case you’re wondering, a poster I am not especially fond of) simply because he obviously knows a lot more about this subject than you, and is doing a pretty decent job of explaining the issue for laymen. This attack takes the form of personal invective and also involves you attributing things to Scylla which he did not say (and I’m wondering why you have been allowed to get away with such a blatant violation of board rules). Liberal (another poster who is not one of my favorites) points this out to you and you turn around and personally attack him. Do you have anything other than personal attacks in your arsenal? Some facts, maybe? So far in this thread, every time you’ve opened your mouth you’ve simply made yourself look like a bigger and bigger idiot. Considering where you started, that’s quite an accomplishment. [Previous page](https://boards.straightdope.com/t/bush-there-is-no-trust/289334.md?page=8) [Next page](https://boards.straightdope.com/t/bush-there-is-no-trust/289334.md?page=10)