Eight False Things The Public “Knows” Prior To Election Day

[Damuri_Ajashi]

@Sam_Stone

One more point about the stimulus: Even the CBO report says that over the long run, the stimulus will be a net negative to the U.S. economy (i think they point to -.3% GDP after ten years with the stimulus than without).

You make it sound like the CBO is MSNBC. If there is a nonpartisan scorekeeper anywhere in DC, the CBO is it.

While TARP was probably a bigger factor in averting disaster than the stimulus, the stimulus was also instrumental in averting disaster. Perhaps this cost us some long term growth but I would appreciate a cite to the CBo saying what you say they say.

We’re talking 870 billion dollars here. At 3.5% annual interest, that’s a permanent hit to the U.S. budget of 30 billion dollars per year. That’s 30 billion dollars every year that could have been spent on research or infrastructure or left in the pockets of the American taxpayer.

You are assuming that we would have avoided another great depression without it.

The minute the last dollar of stimulus money is spent, it stops being a net benefit to the economy, and starts to be a drag on the economy… …Therefore, the stimulus only makes sense if the recession is short enough that by the time the check for the stimulus is due the economy is recovering nicely and can afford the hit. …
…One of the arguments that the economists opposed to the stimulus made was that if the recession had an ‘L’ shaped recovery (in other words, it’s a contraction followed by a long period of low growth), then the stimulus risks a double-dip recession or at least adds a burden to a weak economy. …
…Well, guess what? It’s an ‘L’ shaped recovery so far. …
…So for it to have been a good idea, it either had to avert total economic melt-down, or at least its positive effect had to be so strong (big multiplier) that it would outweigh the long-term negatives. That clearly didn’t happen.

And if I asked you a year and a half ago (when grain shipments were rotting at port because the global economy was melting down when unemployment was rising so fast that between the introduction of the stimulus and the signing of the stimulus, we had already reached the 8% unemployment that Christine Romer said we would be avoiding with the stimulus) whether total economic collapse was possible would you have said, no?

Finally, the additional debt is going to hamstring the Fed. For example, let’s say that the velocity of money starts to pick up because of a recovering economy. In that case, the Fed’s main task is going to be to keep inflation in check. One of the big tools for doing that is to raise interest rates. But every point of interest rate raises the debt servicing cost of the stimulus by almost 10 billion dollars per year.

Once we are energy independent and have a balanced budget, why is it such a good idea to keep inflation in check?

In 1981, the federal funds rate went up into double digits. If that happens again, the interest on the stimulus alone is going to exceed the annual cost of NASA, the Department of Education, and the Department of Energy combined. And the interest on the overall debt at a 10% interest rate would be 1.3 trillion dollars per year - double the U.S. military budget.

I quite agree. How much of that debt was created under Democratic administrations and how much of it was created under Republican administrations. Now how much of that debt was created to at least TRY to avert economic disaster and how much of that debt was created to provide tax cuts to the rich?

[/quote]
The other alternative is to let the inflation happen, and let it devalue the debt. The problem with that is that the U.S. has been buying up very short-term debt to take advantage of current low interest rates. If it becomes clear that the U.S. is devaluing its money, it won’t be able to roll over the debt without paying high interest rates. That could cause a debt crisis.
[/quote]

Like I said, if you balance the budget and become energy independent, we have a lot of flexibility to just absorb that inflation because the inflation would devalue our currency and improve our exports. Sure it would increase the dollar interest rate but there would be increased inflation as well, remember.

This is the corner the U.S. government has been painting itself into with its incredibly bad and irresponsible fiscal policy.

And who do you think has done MOST of the painting? Democrats or Republicans. I know I know, you’re not partisan and neither was I until I realized that the Republicans were talking a good game while being far more irresponsible than the Democrats.

[Damuri_Ajashi]

@John_Mace

Regarding the split between government and private sector jobs, my Google fu is underwhelming. Or, there just isn’t any good info out there. I find plenty of articels from a year ago, and nothing recent. But the ones from a year ago, like this one from the NYT, don’t support the 90% private sector jobs claim.

This is absolutely true. A large portion of the jobs created or saved have been teachers, police and firefighter. That is simply where states spent the money. Now you have to ask what those teachers cops and firemen did with their paychecks. They didn’t spend it on more teachers, cops and firefighters, they used the money to pay bills and despite all we say about Chinese trade, most of your consumption is still domestically produced.

[Damuri_Ajashi]

@Sam_Stone

One illuminating question asked:

Questioner: “If the stimulus bill did not do what it was originally forecast to do, then that would not have been detected by the subsequent analysis, right?”

Doug Elmendorf: “That’s right. That’s right.”

Yes it is impossible to tell, but we have on set of theories that are widely accepted by economists around the world saying that stimulus should have done some good and then we have a far less subscribed theory that is mostly subscribed to by partisans that says the opposite.

[Damuri_Ajashi]

@Little_Nemo

You’re just not seeing the problem. Say I have a hundred thousand dollars in the bank. Every morning I write myself a check for a hundred thousand dollars and every afternoon I deposit that check into my account. Obviously I’ll never run out of money doing this.

How many days will it take me to become a millionaire by doing this?

Presumedly many of you feel that if I deposit a $100,000 check into my account every day, I’ll be a millionaire in ten days.

Well, if you were writing a check from your citibank account to your Chase account and the check didn’t bounce, then, you realize that we aren’t writing a check into the same exact account, right. Its not like we are raiding the Social Security fund to fund the social security fund, right?

I think I’ve posted this example before but, some 401Ks allow you to borrow from your retirement account. Your retirement account basically gets your IOU (with a relatively low interest rate). You have to pay that money back or really bad tax things will happen. Does your retirement account have an asset or are you merely playing a shell game?

If there were no federal obligations backing social security, congress could defund social security immediately, but they can’t because social security doesn’t depend on the charity of congress to fund its obligation (at least not yet).

[Little_Nemo]

Damuri, I’m going to try again because you’ve been willing to discuss it without being insulting.

Let me repeat what I said back in post 79:

We’re not claiming that there’s going to be a default. The point is that the money isn’t sitting there waiting to be collected.

Right now it’s 2010. Let’s say the total payout for social security is $800,000,000 a year. The government is collecting $1,000,000,000 a year in social security taxes. It pays out $800,000,000 of that and has a $200,000,000 surplus. It “invests” the surplus in treasury bonds.

So the treasury just sold $200,000,000 worth of treasury bonds which will be worth $300,000,000 in twenty years. The United States spends the $200,000,000 it just received on a new aircraft carrier or something.

Now let’s move ahead to 2030. Because more people have retired the total social security payout is now $1,300,000,000 per year. The social security department still collects $1,000,000,000 a year in social secuirty taxes. So it’s short $300,000,000. Not a problem because it has a bunch of treasury bonds that just matured and they’re worth $300,000,000. The social security people cash in their bonds and pay out this year’s social security allotments.

But here’s the catch. Go back one step. The social security department (a branch of the United States government) just cashed in $300,000,000 worth of treasury bonds. That means the treasury department (another branch of the United States government) just had to pay out $300,000,000. Where do they get that $300,000,000 from?

They don’t have $300,000,000 set aside for this purpose. They don’t even have the $200,000,000 they collected back in 2010 (that was used to buy an aircraft carrier which has since been decommissioned). So the United States government has to collect $300,000,000 in taxes to pay off these bonds.

Now let’s say that instead of buying US treasury bonds, we bought Canadian bonds.

It’s 2010. The social security payout is $800,000,000 for this year. The government collects $1,000,000,000 a year in social security taxes. It pays out $800,000,000 of that and has a $200,000,000 surplus. The United States government invests this surplus by buying $200,000,000 worth of Canadian twenty-year bonds.

Now we move ahead to 2030. The social security payout is now $1,300,000,000 for the year. The government once again collects $1,000,000,000 in social security taxes. Then it calls up Ottawa and tells them that it’s cashing in its Canadian bonds. The Canadian taxpayers have to come up with $300,000,000 and send it to us.

And for the sake of argument, let’s consider a third alternative. One where social security is operated on a pay-as-you-go plan. That’s no surplus taxation. We collect tha mount of taxes needed each year to pay of that year’s budget.

So here’s all the numbers:

Plan A (the United States government “invests” in United States bonds)
2010 = $1,000,000,000 collected in taxes - $800,000,000 paid out
2030 = $1,300,000,000 collected in taxes - $1,300,000,000 paid out
combined total = $2,300,000,000 collected in taxes - $2,100,000,000 paid out

Plan B (the United States government invests in Canadian bonds)
2010 = $1,000,000,000 collected in taxes - $800,000,000 paid out
2030 = $1,000,000,000 collected in taxes - $1,300,000,000 paid out
combined total = $2,000,000,000 collected in taxes - $2,100,000,000 paid out

Plan C (pay-as-you-go with no investment)
2010 = $800,000,000 collected in taxes - $800,000,000 paid out
2030 = $1,300,000,000 collected in taxes - $1,300,000,000 paid out
combined total = $2,100,000,000 collected in taxes - $2,100,000,000 paid out

[septimus]

@Little_Nemo

[gibberish deleted]… You were wrong about the martingale system.

Did you read the thread on the mathematics board? You even simulated the question by hand on a calculater(!) Did you apply the correction I told you of on the original thread?

Let’s agree on a mathematician to serve as arbiter, agree on a Doper to serve as escrow agent, and each put up $10,000 on the matter! This way, you can profit from my wrongness and condescension!

(And please … If you insist on continuing the insults, take them to BBQ Pit.)

[septimus]

@Little_Nemo

So here’s all the numbers:

Plan A (the United States government “invests” in United States bonds)
combined total = $2,300,000,000 collected in taxes - $2,100,000,000 paid out

Plan B (the United States government invests in Canadian bonds)
combined total = $2,000,000,000 collected in taxes - $2,100,000,000 paid out

I’ve deleted your indecipherable arithmetic, but if you think you’ve found away to arbitrage Canadian bonds vs. U.S. bonds for a 15% profit, you should try for a job on Wall Street.

Is it possible that you ignore that the U.S. Treasury borrows exactly what it needs to borrow? If Soc Sec doesn’t lend the money to the Treasury, Treasury will sell those bonds elswhere.

AFAICT, two completely unrelated points have been conflated. Let me write them explicitly:
(1) U.S. Treasury bonds may be a bad investment, because the U.S. may default or inflate.
(2) An agency shouldn’t lend money to an affiliate. If a Google Research unit needs funding it should get it outside, rather than obtaining funds from a Google profit center.

I suspect that all of us will worry that (1) may be true, and agree that (2) is false. (I mention (2) only because some in the thread seem to be arguing that it’s true, though I’m sure they’re just unable to articulate their actual point, if any, in a clear fashion.)

The threat to the U.S. dollar and its bonds is a real threat, about which much could and should be said … in a separate thread.

One of the threats is right-wing rhetoric, much of which is driven by vested interests who seek quick profits even at the expense of long-term U.S. prosperity. The gibberish we’ve seen in this thread about SocSec Trust Fund is a good example.

The bizarre notion that shares in Acme Widgets or Zimbabwe government bonds are “real investments” in a sense that U.S. Treausury bonds are not, is promulgated by those who want a quick infusion of taxpayer funds into the stock market. The implications of such a plan are far too complicated to detail here, but the biggest immediate effect, and the reason Republican campaign donors are so hot for the idea, is very clear: It will lead to quick profits for present-day shareholders (though likely long-term ill health for the market, American economy, and taxpayers).

I don’t think Litte Nemo is either a right-wing idiot or even a right-winger. But his prattling of this right-wing nonsense increases my (already deep) concern for American politics.

[Stratocaster]

@septimus

I’ve deleted your indecipherable arithmetic, but if you think you’ve found away to arbitrage Canadian bonds vs. U.S. bonds for a 15% profit, you should try for a job on Wall Street.

Seriously, what was indecipherable? Ignore the specific return on the Canadian bonds, just assume “something greater than zero.” Assume that they invested an amount that would return the needed dollars. (BTW, quick math, but that doesn’t seem like a wacky return.)

The logic seems completely, mathematically sound to me. The issue is not default, the issue is that the money is “pseudo-invested.” Seriously, help me see your point–what about Nemo’s logic is wrong? Scenario A we have to collect more than we ultimately pay, not so for the other scenarios. Again, I do not see the flaw, and the fact that those bonds would be sold elsewhere doesn’t change the impact of SS on the budget.

[septimus]

@Stratocaster

Seriously, what was indecipherable?

According to Little Nemo’s “reasoning”, in one case Soc Sec gets $300 million from Canada at no cost to U.S. Treasury. In the other case, the U.S. Treasury has to come up with the $300 million, e.g. by raising taxes. I’ll explain the flaw (yet again), but before I do, let me pose a counter-question:

If there were no flaw, and Nemo’s logic were … err … logical, then he’s found a way to make $300 million appear from nowhere! (Or to look at it the other way, Soc Sec has found a way to disappear the same sum). Does that seem likely to you?

Now for Nemo’s flaw. I’ve tried the default font size, and “size=4.” I’ll use size=5 this time; if that’s still not big enough yet, sorry.

The total U.S. Treasury borrowing is independent of Soc Sec’s action. If Soc Sec buys $300 million less U.S. debt, the Treasury will find another borrower. The taxpayers (or whoever) will have to come up with the $300 million to redeem those bonds whether SocSec is the bondholder or not. (Note that coming up with the alternative buyer might have adverse affect on U.S. interest rates and economy, but that’s a secondary matter we can delve into once you guys understand that the $300 million can’t be disappeared or created like a magician’s trick.)

Let me state this in a slightly different way. Government borrowing will be the difference between other revenues and expenses. Obviously you get different answers depending on whether you include the SocSec Trust Fund as part of the “Government” or not. Either model works fine, although they might give different perspective on the relevant debt paper. What doesn’t work is an inconsistent model, or a model where a sober adult can confuse himself into believing that the U.S. government could have gained $300 million in the Trust Fund if only they understood 3rd-grade arithmetic or bought “real assets” instead of that phony U.S. Treasury paper.

[Mr.Moto]

Well, that “consistency” as you put it served to hide the total deficit in years past and amplify the projected deficits in the future. It was a political trick that served to protect the spending priorities of a couple generations of political leaders and constrain the choices of their successors.

[John_Mace]

@Damuri_Ajashi

This is absolutely true. A large portion of the jobs created or saved have been teachers, police and firefighter. That is simply where states spent the money. Now you have to ask what those teachers cops and firemen did with their paychecks. They didn’t spend it on more teachers, cops and firefighters, they used the money to pay bills and despite all we say about Chinese trade, most of your consumption is still domestically produced.

That’s irrelevant to the topic we’re discussing-- whether the stimulus worked, as measured by the metric Obama set. Part of that metric was that 90% of the jobs created by the stimulus would be in the private sector.

[kidchameleon]

@Damuri_Ajashi

I think I’ve posted this example before but, some 401Ks allow you to borrow from your retirement account. Your retirement account basically gets your IOU (with a relatively low interest rate). You have to pay that money back or really bad tax things will happen. Does your retirement account have an asset or are you merely playing a shell game?

Your retirement has an asset but you’ve got a wash in the deal, no net change in assets (ignoring investment rate vs. interest rate). I just borrowed money from my 401k to make an investment, I didn’t get any new wealth, I just moved some of my assets to a different one.

I think the big problem is that the quote in the OP doesn’t note that the trust fund is backed by US funds that the government will have to pay back. It doesn’t make it a bad investment but one that will have to be part of the government’s budget in the future.

[gonzomax]

Social Security does not contribute to the deficit. It is self sustaining. It is solvent for the next 27 years. If we tweek it, it will be solvent a lot longer. In 27 years ,if we do nothing, they may have to pay 80 percent to continue its solvency. But it can easily be fixed to pay 100 percent. But it does not take tax dollars to continue the full payments. It is run on 1.5 percent of its pool. If it is privatized, it will be a huge pile of free money to those who would run it. Can you imagine the money a bankster would have in his hands if he could get the management cost up to 15 or 20 percent. It would be like those who run the health companies. They pay themselves hundreds of millions of dollars.

[clairobscur]

@Little_Nemo

I also question the fact that the life expectancy of 65 year olds has remained constant. I don’t have a cite handy but anecdotely it seems that life support technology that keep people alive by artificial means has become a lot more common.

There was an article a couple days ago in my favorite newspaper about centenarians. There was a bit more than 1,000 of them in 1970 in France. They’re now about 15,000, and the medium projection is about 200,000 in 2060 (low : about 100,000 high : about 400,000).

I guess the situation is similar in all developped countries, USA included.

[Damuri_Ajashi]

@Little_Nemo

Damuri, I’m going to try again because you’ve been willing to discuss it without being insulting.

Let me repeat what I said back in post 79:Now let’s say that instead of buying US treasury bonds, we bought Canadian bonds.

It’s 2010. The social security payout is $800,000,000 for this year. The government collects $1,000,000,000 a year in social security taxes. It pays out $800,000,000 of that and has a $200,000,000 surplus. The United States government invests this surplus by buying $200,000,000 worth of Canadian twenty-year bonds.

Now we move ahead to 2030. The social security payout is now $1,300,000,000 for the year. The government once again collects $1,000,000,000 in social security taxes. Then it calls up Ottawa and tells them that it’s cashing in its Canadian bonds. The Canadian taxpayers have to come up with $300,000,000 and send it to us.

And for the sake of argument, let’s consider a third alternative. One where social security is operated on a pay-as-you-go plan. That’s no surplus taxation. We collect tha mount of taxes needed each year to pay of that year’s budget.

So here’s all the numbers:

Plan A (the United States government “invests” in United States bonds)
2010 = $1,000,000,000 collected in taxes - $800,000,000 paid out
2030 = $1,300,000,000 collected in taxes - $1,300,000,000 paid out
combined total = $2,300,000,000 collected in taxes - $2,100,000,000 paid out

Plan B (the United States government invests in Canadian bonds)
2010 = $1,000,000,000 collected in taxes - $800,000,000 paid out
2030 = $1,000,000,000 collected in taxes - $1,300,000,000 paid out
combined total = $2,000,000,000 collected in taxes - $2,100,000,000 paid out

Plan C (pay-as-you-go with no investment)
2010 = $800,000,000 collected in taxes - $800,000,000 paid out
2030 = $1,300,000,000 collected in taxes - $1,300,000,000 paid out
combined total = $2,100,000,000 collected in taxes - $2,100,000,000 paid out

I understand what youa re saying but the part that you miss in Plan A is that the trust fund now has $200,000,000 in treasuries plus interest.

In Plan C, congress can decide at any moment that they will stop funding social security. Not possible with plan A, at least not to the extent that the trust fund holds US obligations.

Where the money comes from is irrelevant. The value of treasuries don’t evaporate simply because they are being held by an agency of the US government.

I know its not satisfying to hear that an agency of the federal government has assets taht are backed by the federal taxing power but that makes it no less of an asset. Those future taxes are reversing the effects of deficit spending today.

Conservatives, sensing an ally in Alan Greenspan, asked him to comment on whether he thought the trust fund held real assets and his reply was “yes” Even someone like Greenspan couldn’t bring himself to contort reality sufficiently to characterize the trust fund assets as anything but assets.

[Damuri_Ajashi]

@Stratocaster

Seriously, what was indecipherable? Ignore the specific return on the Canadian bonds, just assume “something greater than zero.” Assume that they invested an amount that would return the needed dollars. (BTW, quick math, but that doesn’t seem like a wacky return.)

The logic seems completely, mathematically sound to me. The issue is not default, the issue is that the money is “pseudo-invested.” Seriously, help me see your point–what about Nemo’s logic is wrong? Scenario A we have to collect more than we ultimately pay, not so for the other scenarios. Again, I do not see the flaw, and the fact that those bonds would be sold elsewhere doesn’t change the impact of SS on the budget.

That’s the thing. Its not pseudoinvested, its invested in the safest investment in the world. If there is a safer investment anywhere in the world, noone on wall street knows what it is.

[Damuri_Ajashi]

@septimus

Is it possible that you ignore that the U.S. Treasury borrows exactly what it needs to borrow? If Soc Sec doesn’t lend the money to the Treasury, Treasury will sell those bonds elswhere.

I think this may be where somepeople are getting confused. They seem to approach the social security trasuries as if congress only borrows because they are somehow forced to borrow from teh social secuirty trust fund.

If congress ran surpluses, they can redeem treasuries held by banks and pensions, they were going to borrow that money anyways. The future taxes were going to be paid anyways (more likely is taht the trust held treasuries will be refinanced into Chinese held treasuries (or some other private investor).

[Stratocaster]

@septimus

According to Little Nemo’s “reasoning”, in one case Soc Sec gets $300 million from Canada at no cost to U.S. Treasury. In the other case, the U.S. Treasury has to come up with the $300 million, e.g. by raising taxes. I’ll explain the flaw (yet again), but before I do, let me pose a counter-question:

If there were no flaw, and Nemo’s logic were … err … logical, then he’s found a way to make $300 million appear from nowhere! (Or to look at it the other way, Soc Sec has found a way to disappear the same sum). Does that seem likely to you?

Yes. Nemo points out, correctly, that the U.S. is spending the surplus. The taxes collected “fund” bonds, and the cash paid for those bonds is spent. You’re ignoring the fact that the psuedo investment results in the tax dollars being spent CURRENTLY by the U.S. Not so with an investment in Canadian bonds. The money does not miraculously appear. It’s just not spent.

Now for Nemo’s flaw. I’ve tried the default font size, and “size=4.” I’ll use size=5 this time; if that’s still not big enough yet, sorry.

The total U.S. Treasury borrowing is independent of Soc Sec’s action. If Soc Sec buys $300 million less U.S. debt, the Treasury will find another borrower. The taxpayers (or whoever) will have to come up with the $300 million to redeem those bonds whether SocSec is the bondholder or not. *

This is incorrect. The U.S. floats bonds to fund stuff, incredible as that sounds. There have actually been periods where certain bond categories were suspended, specifically to reduce the debt because of surpluses. The aggregate amount of bonds issued varies directly with the amount of funding currently required. So, your premise is false. There is not some set amount of bonds that get issued and purchased, regardless of the U.S. need for funds. If our current funding requirements go down–using the offered example, say if SS surplus was invested completely in foreign bonds–then so will the amount of U.S. bonds issued. There would be no need. Again, you are incorrect. But the font size almost convinced me. :rolleyes:

[Sam_Stone]

@Damuri_Ajashi

While TARP was probably a bigger factor in averting disaster than the stimulus, the stimulus was also instrumental in averting disaster.

You keep saying that as if it’s a fact, rather than being a Democratic Party talking point. There’s no evidence whatsoever that the stimulus was instrumental in avoiding a disaster. The CBO’s report, if taken at face value, says that unemployment might have been higher by .7 to 1.8%. That’s not a collapse of the economy.

Perhaps this cost us some long term growth but I would appreciate a cite to the CBo saying what you say they say.

I already linked to the CBO report. It’s in there.

You are assuming that we would have avoided another great depression without it.

Hey, that’s what the CBO said, too. Nowhere in that report does it say that the stimulus averted a great depression. Even if you buy the Keynesian model they’re using.

And if I asked you a year and a half ago (when grain shipments were rotting at port because the global economy was melting down when unemployment was rising so fast that between the introduction of the stimulus and the signing of the stimulus, we had already reached the 8% unemployment that Christine Romer said we would be avoiding with the stimulus) whether total economic collapse was possible would you have said, no?

Apples and oranges. The financial system was collapsing. The grain wasn’t sitting in barges waiting to move because the economy was slowing down. It was sitting there because the financial system was frozen solid and no one could get authorization to pay anyone else. THAT was an emergency, but it had nothing to do with the stimulus. I was in favor of TARP because I thought that emergency required drastic, immediate action. The stimulus didn’t even get voted on for months after that, and didn’t start to affect the economy for still more months later. The crisis had long past, and what we were left with was an economy badly distorted because of an asset price collapse. That’s a totally different problem.

Once we are energy independent and have a balanced budget, why is it such a good idea to keep inflation in check?

Because inflation is destructive. It destroys savings, it distorts prices and makes markets less efficient. It distorts investments. But in the current situation, it has another problem - inflating the U.S. currency will drive up the lending rate because no one is about to lend money to the U.S. in exchange for future U.S. dollars if those dollars are devaluing all the time - unless you offer higher interest rates to compensate. The U.S. now has so much debt that higher interest rates will break the budget.

I quite agree. How much of that debt was created under Democratic administrations and how much of it was created under Republican administrations. Now how much of that debt was created to at least TRY to avert economic disaster and how much of that debt was created to provide tax cuts to the rich?

I don’t particularly care. You’re trying to play partisan games, and I’m just telling you what the economic reality is.

Like I said, if you balance the budget and become energy independent, we have a lot of flexibility to just absorb that inflation because the inflation would devalue our currency and improve our exports. Sure it would increase the dollar interest rate but there would be increased inflation as well, remember.

Oh, all you have to do is balance the budget and become energy independent, huh? While you’re at it, why don’t you solve world hunger and get the world to dismantle its weapons? Then we can all inflate away while holding hands and singing kumbayah.

And who do you think has done MOST of the painting? Democrats or Republicans. I know I know, you’re not partisan and neither was I until I realized that the Republicans were talking a good game while being far more irresponsible than the Democrats.

I’d say they’re equally irresponsible. The level of shenanigans they’re willing to engage in is situational. But mark my words - if the new Republican Congress goes in and begins with business as usual, the Tea Party will turn on them like wolverines. There’s a dynamic going on in the U.S. that I’ve never seen before. People are genuinely pissed off, and they’re not going to put up with any more republicrat nonsense.

[Little_Nemo]

@Damuri_Ajashi

I understand what you are saying but the part that you miss in Plan A is that the trust fund now has $200,000,000 in treasuries plus interest.

But all treasury bonds are is a promise by the United States government that it will collect enough taxes in 2030 to pay them off.

How is that any different than if the government didn’t buy the treasury bonds? It would presumedly still collect taxes for the social security budget in 2030. It’s just doing it with an additional step of routing the money through treasury bonds.

Either way none of the money that’s being collected in 2010 will be used to pay the 2030 budget.