# manhattan: losing touch with reality, and following in Lib's cryptic footsteps **URL:** \ **Category:** The BBQ Pit\ **Created:** [February 18, 2005, 10:23am UTC](https://boards.straightdope.com/t/manhattan-losing-touch-with-reality-and-following-in-libs-cryptic-footsteps/290691 "2005-02-18T10:23:07Z")\ **Posts on this page:** 20\ **Page:** 5
**Author:** ![Ravenman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ravenman/32/2929_2.png) [@Ravenman](https://boards.straightdope.com/u/Ravenman)\ **Post date:** [February 19, 2005, 12:16am UTC](https://boards.straightdope.com/t/manhattan-losing-touch-with-reality-and-following-in-libs-cryptic-footsteps/290691/81 "2005-02-19T00:16:47Z")
> [@RTFirefly](#): > > Not in so many words. But when A==\>B, and you say A, then you may not have said B, but only in a very technical, hairsplitting sense. Give it up! Bush has repeatedly said, 2018 ==\> Social Security deficit and 2042 ==\> SS bankrupt. I seem to have gotten a grasp of your underlying presmise in all your senseless arguments on this senseless debate: that the things Bush says are lies because he is a liar. > [@](#): > > And more fundamentally, what are the “promises” that he’s talking about? Promised _benefits_, or promised _repayment of Treasury instruments_? This is just plain nitpicking. It does not mean that Bush said that the system will fail in 2018. > [@](#): > > And he also says: > Short version: there’s no money there; there’s only IOUs. If you’re going to simplfy it to that degree, that’s accurate. Do you contend that there IS cash in the SS trust fund? Do you understand that the IOUs have to be converted into cash somehow, and it will require government spending to do so? ---
**Author:** ![RTFirefly](https://avatars.discourse-cdn.com/v4/letter/r/c77e96/32.png) [@RTFirefly](https://boards.straightdope.com/u/RTFirefly)\ **Post date:** [February 19, 2005, 12:57am UTC](https://boards.straightdope.com/t/manhattan-losing-touch-with-reality-and-following-in-libs-cryptic-footsteps/290691/82 "2005-02-19T00:57:04Z")
> [@manhattan](#): > > For the record, I did not infer, I implied, just as **Gaudere** said. Seems like kind of a silly rule to me, but no matter. Henceforth in GD, there is no possibility that **RT** is an idiot, he is simply a liar. Since ‘liar’ is manny-speak for “someone whose logic is superior to mine,” I’ll accept that as praise. Not _high_ praise, considering the source, but praise nonetheless. ---
**Author:** ![RTFirefly](https://avatars.discourse-cdn.com/v4/letter/r/c77e96/32.png) [@RTFirefly](https://boards.straightdope.com/u/RTFirefly)\ **Post date:** [February 19, 2005, 1:09am UTC](https://boards.straightdope.com/t/manhattan-losing-touch-with-reality-and-following-in-libs-cryptic-footsteps/290691/83 "2005-02-19T01:09:58Z")
> [@Ravenman](#): > > Give it up! Bush has repeatedly said, 2018 ==\> Social Security deficit and 2042 ==\> SS bankrupt. I seem to have gotten a grasp of your underlying presmise in all your senseless arguments on this senseless debate: that the things Bush says are lies because he is a liar. Oh hell, I’m going to have to start to repeat myself. So it’s self-quoting time: > [@RT](#): > > It’s pretty obvious what Bush is saying here: there is no Trust Fund; there are no accumulations in it; the assets we thought we’d piled up there are already spent; the system is really pay-as-you-go; the moment (2018) when expenses exceed revenues, we’ve got a problem. > > There’s only one logical implication there, that Bush doesn’t say outright, but that must be true if everything else he says is true: in 2018, when expenses exceed revenues, Social Security won’t be able to pay its promised benefits. That’s the inescapable implication of Bush’s words. > [@](#): > > This is just plain nitpicking. No, not at all. The promise to provide Social Security benefits, and the promise to make good on instruments of debt, are two very different classes of promise. The one is guaranteed by legislation; legislation can be altered, and with it the nature of the promise. Treasury notes can’t be altered; they are a promise to pay stated amounts at stated times. > [@](#): > > If you’re going to simplfy it to that degree, that’s accurate. Do you contend that there IS cash in the SS trust fund? Do you understand that the IOUs have to be converted into cash somehow, and it will require government spending to do so? :sigh: You’re confusing what I know and believe with what I’m pointing out that Bush is saying. There’s probably a trivial amount of cash in the Trust Fund at any one time, and that’s good; it should be out earning interest. Bush uses this fact to make it sound as if there’s nothing but a bunch of worthless pieces of paper in the Trust Fund (on those occasions when he admits to its existence). Like I said earlier: > [@](#): > > Now tell me (and here we get back into my response to Shodan): has Bush said, “There’s not money in the Trust Fund, but what’s there is still worth $1.5 trillion”? No, he hasn’t. He’s said there’s a “pile of IOUs” - contrasting that from the “pile of money”. > > So what’s the message? Pile of money = good; pile of IOUs = bad. > > Why are IOUs bad, if they’re worth the same as money? If they’re worth the same as money, they’re not bad. So Bush’s message is, those IOUs are not worth the same as money. ---
**Author:** ![FinnAgain](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/finnagain/32/12500_2.png) [@FinnAgain](https://boards.straightdope.com/u/FinnAgain)\ **Post date:** [February 19, 2005, 1:13am UTC](https://boards.straightdope.com/t/manhattan-losing-touch-with-reality-and-following-in-libs-cryptic-footsteps/290691/84 "2005-02-19T01:13:14Z")
Oh and, thank you **Gaudere** for taking the time to respond in detail; sorry I missed your posts when I first read over this thread. ---
**Author:** ![RTFirefly](https://avatars.discourse-cdn.com/v4/letter/r/c77e96/32.png) [@RTFirefly](https://boards.straightdope.com/u/RTFirefly)\ **Post date:** [February 19, 2005, 1:32am UTC](https://boards.straightdope.com/t/manhattan-losing-touch-with-reality-and-following-in-libs-cryptic-footsteps/290691/85 "2005-02-19T01:32:37Z")
> [@Shodan](#): > > You are making it progressively harder to believe that you are doing anything but deliberately lying. > > The title of the thread was **George W. Bush, Oathbreaker**. Note the absence of a question mark - this was an unambigous accusation. > You said it [here.](http://boards.straightdope.com/sdmb/showthread.php?t=300370) Now you are saying you didn’t. So when I accuse Bush of implying that the money won’t be there to pay back the loans from the Trust Fund, and in that context I bring up the Fourteenth Amendment, you’re saying that I’m accusing Bush of preparing to welsh on _the entire national debt_, rather than just the portion owed to Social Security. Well, from that piece of fairy-cake, you might as well extrapolate the whole frickin’ _universe_. Y’know, defending what I’m actually _saying_ is enough work here, without having to deal with all these absurd misreadings. > [@](#): > > That **is** his plain meaning, you fucking moron, because you have never produced a single solitary scrap of evidence that Bush has ever questioned that the IOUs that constitute 100% of the “trust fund” will be redeemed. He has never stated or implied this. All your ridiculously strained attempts at convincing us that he has are utter horsehit. And the same back atcha. “There is no trust” certainly implies that there’s nothing in the trust to be redeemed. (If the house doesn’t exist, then there damned sure isn’t a sofa in its living room.) “It’s been spent” implies the same. “It’s just pay as you go” is a wee bit different from “it’s just pay as you go, except for the trivial detail of the $1.5 trillion in assets in the trust fund.” > [@](#): > > No reasonable person can construe “we have to meet these commitments” as “we aren’t going to meet these commitments”. If you are going to construe it that way, it means only that you are not a reasonable person. Sorry, but this has more to do with _Bush_ not being a reasonable person than my not being so. He’s already pretty much said he’d “meet these commitments” by drastically slashing the commitments in question. So ya think it’s important to pin him down to _which_ commitment he’s talking about, given the very different nature of the commitments? Sheesh. > [@](#): > > It’s too bad. Because this is apparently the best that the liberals can come up with to oppose the Bush plan to reform Social Security, and if there are any serious flaws in the Bush plan, no one reasonable is going to listen because you will have blown your credibility with these ridiculous misrepresentations. It isn’t the best I can come up with; I assume it must be the worst, because it’s exceedingly rare that I find myself in this numerically lopsided a battle. But I’ll keep y’all entertained for awhile longer if you like. 🙂 ---
**Author:** ![RTFirefly](https://avatars.discourse-cdn.com/v4/letter/r/c77e96/32.png) [@RTFirefly](https://boards.straightdope.com/u/RTFirefly)\ **Post date:** [February 19, 2005, 1:57am UTC](https://boards.straightdope.com/t/manhattan-losing-touch-with-reality-and-following-in-libs-cryptic-footsteps/290691/86 "2005-02-19T01:57:59Z")
> [@Lemur866](#): > > RT, I don’t understand what you’re complaining about. > > Of course the money “borrowed” from the Social Security trust fund isn’t there any more, it was spent. There’s no reason to borrow money unless you’re going to spend it, right? Why would the Federal Government borrow money and then…keep it under a mattress? > > The money taken in from Social Security taxes was spent on social security payments, and borrowed by the rest of the government for the general fund. The money isn’t sitting there waiting to be paid back, any more than money a business borrows from a bank is sitting there waiting to be paid back. That doesn’t mean the money can’t be paid back, or won’t be paid back, just because there’s no money today to pay it back. Yeah, _exactly_ what I’ve been saying. > [@](#): > > Think about it. You take out a loan to buy a car. You buy a car. The money is gone! You can’t pay it back! You must be going to default! Yeah, if you had no income, and assets, then you’d have to default on the loan, since yes, you don’t have enough money under your mattress to pay back the bank. Except you do have an income, and you’re going to pay back the loan using money you are planning to make…in the future. After all, that is were we are all going to spend the rest of our lives. The government has an income too. If you think for a moment, you’ll realize where the government’s money comes from. OK, now, think of this example from _the bank’s_ POV. _They_’ve loaned money to me. **I** ’ve spent it. Like you say, that doesn’t bother them; (a) they don’t _really_ care if I spend the money or not, although (b) they _assume_ I will, to the extent they think about it. But they don’t see it as _‘spent’_; they see a note that I’ve signed, which they view as an **asset**. And that’s the difference between the way Bush is talking about the Trust Fund, and the way (a) it really is, (b) the way people here are describing the trust fund as being, and (c) (the only part I can’t understand) the way people here _are saying Bush is describing the Trust Fund_. As I said to Shodan a page back: > [@](#): > > there’s a difference - and most people are quite clear on this - between these two things: (1) my spending a pile of money I got; and (2) my loaning the money to a creditworthy entity via an instrument with a specific interest rate and maturity date. (1) means the money’s gone; (2) means that for all practical purposes, I still have that pile of money - because the instrument I have is worth that money, more or less. It’s an asset that represents money, and it’s customary in this society to consider those things equivalent, unless and until there is nontrivial risk involved - unless there is doubt as to whether I’ll ever be able to redeem my note at face value. > > Bush is using the language of (1). If what he really means is (2), that’s not his plain meaning. Maybe he’s leaving enough wiggle room so he can later, if called for, weasel out and say he really meant (2), but that’s not his plain meaning. > [@](#): > > The “trust fund” isn’t funds that we owe to future retirees, it is money that the government owes itself. Of course it is ridiculous to pay for general revenues with regressive social security taxes like we do today, but that has nothing to do with defaulting on the debt. We don’t have the money today, so we’ll have to pay it in taxes tomorrow. Why Bush should be impeached for saying that is beyond me. If I thought he were saying the same thing _you_ think he’s saying, I’d agree with you. But like I keep saying, he’s using language that says there’s nothing there to redeem. > [@](#): > > And I don’t understand your request for cites. Are you asking for a quote from Bush saying something like, “The national debt will never be defaulted on”? Or, “the U.S. government will repay the loans made to it by the trust fund.” No, here’s a guy who’s said there’s no trust fund; the money’s gone. I think there’s a need for someone to ask him exactly what he means by that - does he mean what everyone here says he means, that the money’s been _loaned_ to the general fund, which has in turn spent it, but the Trust Fund has a pile of Treasury instruments backed by the full faith and credit of the US government? Or does he mean something a little less, um, _definite_ about the Trust Fund? > [@](#): > > No, the reason he won’t repudiate the debt isn’t because he SAID he won’t repudiate the debt, but because it would be disasterous for the economy, we have the ability to repay the debt anyway via taxes, and he’s going to be out of office before it becomes an issue anyway. > > Seriously, what the fuck? You think, you just maybe think, he’s making the present situation seem more drastic than it is, to make a drastic ‘remedy’ an easier sell? After all, if there ain’t no big problem, the fix doesn’t need to be very big either, and he’s after big game. But if there’s no trust fund, then Houston, we’ve got a frickin’ _problem_, and that, I claim, is the impression he’s trying to sell the American people. Also, I’ll admit that I’m concerned with what would happen if Bush is succeeded by someone much like him. He’s piling up an awful lot of debt now, and (barring a serious rollback of the Bush tax cuts) there’ll be a crunch next decade. Something will have to give, and if the idea is sold starting now that there is no trust fund, or we can’t afford to pay it back, or whatever, that will make the job of default that much easier, politically, when someone tries to sell the idea in ten years. And people - prominent Republicans - will try to do exactly that. Bank on it. ---
**Author:** ![bashere](https://avatars.discourse-cdn.com/v4/letter/b/779978/32.png) [@bashere](https://boards.straightdope.com/u/bashere)\ **Post date:** [February 19, 2005, 2:52am UTC](https://boards.straightdope.com/t/manhattan-losing-touch-with-reality-and-following-in-libs-cryptic-footsteps/290691/87 "2005-02-19T02:52:33Z")
> [@RTFireFly](#): > > No, here’s a guy who’s said there’s no trust fund; the money’s gone. I think there’s a need for someone to ask him exactly what he means by that - does he mean what everyone here says he means, that the money’s been loaned to the general fund, which has in turn spent it, but the Trust Fund has a pile of Treasury instruments backed by the full faith and credit of the US government? Or does he mean something a little less, um, definite about the Trust Fund? And I think this is the crux of the misunderstanding. There are three things that could be in the SS admin’s vault (if they had one): a big ol’ pile of money, as in stacks of $100 bills that could be distributed to recepients of SS. That’s not there. Alternately, a big ol’ pile of T Bills, that could simply be resold at auction to whom ever would buy them (T Bills are pretty liquid, even $200 billion a year). That is not there. This would not be the same as cash, but would be roughly equal - the liquidity inherent to them makes them as good as cash. Finally, there could be nothing at all in the vault, other than a ledger entry saying “hey, the Feds owe us money”. That is what’s there. That IOU is vaulable, though (and this is my attempt to answer the question you put to me hours ago - busy day), but cannot easily and readily be converted to cash. That is okay, since the government can issue T Bills that can be sold to the highest bidder, but intragovernmental IOUs aren’t quite T Bills, which aren’t quite cash. It seems he means something “a little less definite”, but there is no hint that he isn’t going to honor those obligations; he is talking about what needs to be done in order to honor those obligations. In order to cover that IOU, we need to do one of a few things - issue new debt, in the form of T Bills, raise taxes (presumably income tax, but keep that in mind because it is important), or cut spending (presumably general revenue spending, but this is also important). Bush has not said that he intends to ignore the presence of those IOUs; he has instead talked about what is going to happen when those IOUs come due (in the SOTU address, which I won’t quote, since you did). The car situation is analogous. You go out and buy a car. You take money out of your 401k plan to do it. You now have to pay yourself back or suffer tax consequences. You ask yourself 1) will I refinance this on my credit card? 2) will I get a second job? 3) will I economize around the house and cut spending? None of those three options involve defaulting on the loan to yourself - in fact, the mere fact of asking those questions implies a certain desire to pay back the loan. If you weren’t interested in paying back the loan, you wouldn’t need to worry about those options. Note that your IOU to yourself, while good, isn’t as good as cash - you would need to find another line of credit to pay back the existing loan. Now, that said, there is cause for concern. Not all of this is Bush’s fault; he inherited a fairly big problem (blame it on Reagan if you like, since it is his fault as much as anyones). The money was spent, keeping income taxes (or the debt, depending on your point of view) artificially low. We’ve received a 25 year reprieve on higher income taxes, and now have to pay for that reprieve, plus interest. That the money was spent is inconvenient for all around, but the fact that is was spent and all the SS admin has to show for it is word from the Federal government that it will be repaid just means that we may have to issue T Bills to take the place of existing, less tangible IOUs. ---
**Author:** ![Liberal](https://avatars.discourse-cdn.com/v4/letter/l/848f3c/32.png) [@Liberal](https://boards.straightdope.com/u/Liberal)\ **Post date:** [February 19, 2005, 10:47am UTC](https://boards.straightdope.com/t/manhattan-losing-touch-with-reality-and-following-in-libs-cryptic-footsteps/290691/88 "2005-02-19T10:47:18Z")
> [@FinnAgain](#): > > In that situation, it isn’t. You said nothing about situations. You bothered to single me out and ask me why I don’t embolden usernames, declaring that it is a longstanding show of respect. Setting aside that I am far from the only person who doesn’t embolden usernames, your only purpose in bringing that up obviously was to demonstrate that I don’t respect other posters. I responded by illustrating to you that merely embolding usernames does not necessarily convey respect. It is astounding that you look everywhere with a magnifying glass for what you call “nitpicking”, and then proceed to make a mountain out of the molehill of typing usernames in bold. > [@](#): > > But then again, I’m sure you understand that society is thermoplastic and not thermosetting and that situations vary while there may still be statistically-valid-rules-of-convention? Gibberish. > [@](#): > > No, I mean you’re being annoying and arguing a point which is not even tangential. The point — and you should know this because you brought it up — is about “nitpicking”. You are the veritable king of nitpickers, roaming the kingdom in search of violators. You are like the man who, lighting a cigarette, requests that others do not smoke. > [@](#): > > You’re either mistaken or deliberately mis-representing the situation. What’s the difference? Why should there be any difference between a mistake and a deliberation if there is no difference between an inference and an implication? > [@](#): > > The inference in particular I was talking about was one made by **Manny** about the intelligence of his debating opponents. As such, it was voiced. And that was the _context_ of the discussion before your off topic nitpick. The sheer laziness of your argument is tedious to the extreme. It’s like you know two words: nitpick and hijack. Any and all responses to you are met simply with, “You’re nitpicking” or “You’re hijacking”. You had clearly confused the words “infer” and “imply”, even admitting so with a smackie. And now you want to do a moon-walking backtrack while displacing your faux pas onto me by accusing me of going off-topic. It’s as though you’ve pulled someone into the swimming pool, and then told others that he threw you in. > [@](#): > > Is you’re-being-fucking-annoying one word? No, it isn’t. Your lame attempt to summon a pile-on is beneath even you. Deal with the argument at hand, or else go back to MPSIMS, where you can make up more board rules about bold letters and such. > [@](#): > > No. Playing semantics in direct disregard to the circumstances in which the words take place is nitpicking, and in particularly poor form if you take it to extremes. I took it exactly where it belonged: explaining to you the difference between an inference and an implication, and even sharing with you how I remember them. That was while you were congratulating Elucidator for his “I pay taxes” rejoinder — apparently satisfied with some hijacks but not others. You didn’t appreciate what I shared, and now you’re flailing all about with a bunch of nonsense. Just stop it. ---
**Author:** ![RTFirefly](https://avatars.discourse-cdn.com/v4/letter/r/c77e96/32.png) [@RTFirefly](https://boards.straightdope.com/u/RTFirefly)\ **Post date:** [February 19, 2005, 12:16pm UTC](https://boards.straightdope.com/t/manhattan-losing-touch-with-reality-and-following-in-libs-cryptic-footsteps/290691/89 "2005-02-19T12:16:05Z")
> [@bashere](#): > > And I think this is the crux of the misunderstanding. There are three things that could be in the SS admin’s vault (if they had one): a big ol’ pile of money, as in stacks of $100 bills that could be distributed to recepients of SS. That’s not there. > > Alternately, a big ol’ pile of T Bills, that could simply be resold at auction to whom ever would buy them (T Bills are pretty liquid, even $200 billion a year). That is not there. This would not be the same as cash, but would be roughly equal - the liquidity inherent to them makes them as good as cash. > > Finally, there could be nothing at all in the vault, other than a ledger entry saying “hey, the Feds owe us money”. That is what’s there. That IOU is vaulable, though (and this is my attempt to answer the question you put to me hours ago - busy day), but cannot easily and readily be converted to cash. That is okay, since the government can issue T Bills that can be sold to the highest bidder, but intragovernmental IOUs aren’t quite T Bills, which aren’t quite cash. There are apparently two equivalent things in the trust fund: one is the usual accounting entries (with the usual nod to “that’s all money is, really”) on the appropriate government computers and printouts. The other is two hundred-odd pieces of paper physically representing those entries. They’re in a file cabinet in West Virginia, IIRC. Either way, I agree that it amounts to the same thing: assets presumably backed by the full faith and credit of the U.S. government, worth approximately $1.5 trillion. And growing. > [@](#): > > It seems he means something “a little less definite”, but there is no hint that he isn’t going to honor those obligations; he is talking about what needs to be done in order to honor those obligations. That’s where we disagree. Of course, as we’ve already discussed, _this_ President won’t either honor or dishonor the obligations; he won’t be in office in 2018. The question is, _what message is he conveying to the American people about whether those obligations will be honored in 2018, if the laws stay unchanged?_ (As distinct from, what will actually _happen_ in 2018, if the laws stay unchanged?) I can’t see any way around it: language like “there is no trust,” “the money’s spent” “it’s just pay-as-you-go, and in 2018 Social Security won’t be taking in enough to pay out what it’s supposed to” is painting a picture of a nonexistent trust fund, one that has no assets. He may be avoiding words that could be held up in court, but that’s irrelevant: what’s going on is fundamentally _political_, not judicial. If he can paint the picture showing an empty vault, and Americans believe his picture, it hardly matters that he hasn’t used legal terms of art. > [@](#): > > Bush has not said that he intends to ignore the presence of those IOUs; he has instead talked about what is going to happen when those IOUs come due (in the SOTU address, which I won’t quote, since you did). Indeed. The picture he painted there was of the overwhelming burden of paying back that tidal wave of debt owed to the Fund. The intended effect, IMHO, was to plant grave doubts in American’s minds about whether we could _afford_ to pay it back. It was to undermine public support for the notion that it _must_ be paid back. One speech won’t do that by itself, of course. But it won’t be just one speech, or just one year. Now Bush’s verbal paintings are somewhat in contradiction. Does that bother him? No. If his object is to undermine faith in the Trust Fund, there’s no reason not to do it in several ways at once: it really doesn’t exist, the money’s been spent, we can’t afford to repay it, whatever. Ultimately, the Social Security Trust Fund really _is_ accounting; and it will be real only if the American people, when crunch time comes next decade, _insist_ on its being real. I contend Bush’s current campaign is just the first major effort in a larger, more long-term campaign to erode public faith in the Trust Fund, to weaken the public’s insistence that it be real. > [@](#): > > Not all of this is Bush’s fault; he inherited a fairly big problem (blame it on Reagan if you like, since it is his fault as much as anyones). The money was spent, keeping income taxes (or the debt, depending on your point of view) artificially low. We’ve received a 25 year reprieve on higher income taxes, and now have to pay for that reprieve, plus interest. That the money was spent is inconvenient for all around, but the fact that is was spent and all the SS admin has to show for it is word from the Federal government that it will be repaid just means that we may have to issue T Bills to take the place of existing, less tangible IOUs. This is off the main subject, but I must take issue with the notion that this isn’t Bush’s fault. Clinton’s last four budgets, taken together, had a surplus _excluding the trust fund surplus_. And that’s all that’s needed to avert a “Social Security crisis” in 2018 (really a general-fund crisis in 2018, unless the government welshes on its debt to the Fund) is for the general fund to balance its budget. Bush came into office in a world where that had been achieved, not just once, but over a four-year period. All he had to do was sustain it. But we know what happened next. The only medium-term threat to Social Security, as it currently exists, is Bush’s tax cuts. Make them go away, and we’re good to mid-century. ---
**Author:** ![Desmostylus](https://avatars.discourse-cdn.com/v4/letter/d/c57346/32.png) [@Desmostylus](https://boards.straightdope.com/u/Desmostylus)\ **Post date:** [February 19, 2005, 12:21pm UTC](https://boards.straightdope.com/t/manhattan-losing-touch-with-reality-and-following-in-libs-cryptic-footsteps/290691/90 "2005-02-19T12:21:10Z")
> [@Jonathan Chance](#): > > Are there seriously analysts out there who believe that US debt instruments won’t be paid back? Are they straight up about this or just blowing smoke over beers? There’s no magic in having people overseas agree with what people in the US say. It’s not just blowing smoke, it’s an attempt to deal with a real, and very serious problem that the U.S. has. That is, the level of U.S. debt, and the U.S. trade deficit. The particular problem that I, personally, am currently dealing with is whether or not it still makes sense to make unhedged investments in US equities. There are arguments on both sides as to whether it’s a good idea or not. But as I see it, it boils down to: how’s the US going to make good on all of the debt obligations that it’s committed itself to, given that it’s net foreign income is negative, has been for a while, and doesn’t look like changing. One way that works out is for the value of the US dollar to fall to about half of its current level. It would enable US exports to become competitive on world markets again, but would mean that foreign holders of US securities would lose money big time. So that’s the sort of situation I have to look at. Assuming that the value of the US dollar _will_ fall, then I have to conclude that it doesn’t make sense to make unhedged investments in US securities. But then I have people from the US telling me that it’s OK, because the social security trust is not really an obligation, so the US debt problem isn’t as bad as I think it is. Make of that what you will. ---
**Author:** ![pantom](https://avatars.discourse-cdn.com/v4/letter/p/34f0e0/32.png) [@pantom](https://boards.straightdope.com/u/pantom)\ **Post date:** [February 19, 2005, 2:54pm UTC](https://boards.straightdope.com/t/manhattan-losing-touch-with-reality-and-following-in-libs-cryptic-footsteps/290691/91 "2005-02-19T14:54:28Z")
Boy, I come here looking for a fight and a debate broke out. For this we were consigned to The Pit? Sheesh. Maybe later I’ll rant, but then again, maybe not. Meantime, given that **Demo** I’m sure hangs out in more or less the same circles as **manhattan** , although in a different country, and that **scylla** was saying much the same thing in the “There is no trust” thread, I think we can reasonably establish that **manhattan** ’s ignorant, stupid or lying (not a mutually exclusive list, btw) when he says that no one is suggesting that the SS obligations will be defaulted on. Anyway, carry on. ---
**Author:** ![Polycarp](https://avatars.discourse-cdn.com/v4/letter/p/82dd89/32.png) [@Polycarp](https://boards.straightdope.com/u/Polycarp)\ **Post date:** [February 19, 2005, 3:11pm UTC](https://boards.straightdope.com/t/manhattan-losing-touch-with-reality-and-following-in-libs-cryptic-footsteps/290691/92 "2005-02-19T15:11:23Z")
We have lost sight of the original point of both the GD and Pit threads in a bunch of semantic quibbles here. Yes, SS deductions are a tax, not a pension-plan contribution. Yes, the moneys collected from them have been moved around the Federal government coffers in a variety of ways over the 70 years that SS has been in existence. Yes, Mr. Bush drew attention to the fact that there will in the future be a point at which SS as currently structured will become a liability, a net payout exceeding income. And no, he did not directly renounce the bonds, but rather implied that some means needed to be found to pay them. The question at hand is whether you trust Mr. Bush’s word that that was indeed his intent in raising the issue. And on that, reasonable men can disagree. Many of us consider his (and his Administration’s) discussions of the reasons for the Iraq War to have been a classic example of bait-and-switch. Links to Al Qaida? WMDs? Iraq as serious threat to American security? If you don’t like any of them, just wait: there’ll be a new reason advanced, that you may like better. And of course, it’ll be exactly what they **meant** all along; it was just your misunderstanding them that led you to think any of those other reasons were what they were _really_ saying. If Mr. Bush is saying, we don’t really need to pay those bonds off, because they’re purely an internal Treasury bookkeeping device, but yeah, we’re going to make sure that SS is funded somehow, you can count on the fact that three months from now, his apologists will be explaining what he **really** meant all along, and it’ll probably be that SS needs to be completely reworked, and people who have counted on it for their retirement had better look for charitable contributions to survive. You don’t think he works like that? Fine; that’s your prerogative. But allow the rest of us to hold to the old adage of “once burned, twice shy.” ---
**Author:** ![Weirddave](https://avatars.discourse-cdn.com/v4/letter/w/919ad9/32.png) [@Weirddave](https://boards.straightdope.com/u/Weirddave)\ **Post date:** [February 19, 2005, 4:06pm UTC](https://boards.straightdope.com/t/manhattan-losing-touch-with-reality-and-following-in-libs-cryptic-footsteps/290691/93 "2005-02-19T16:06:50Z")
> [@pantom](#): > > Meantime, given that **Demo** I’m sure hangs out in more or less the same circles as **manhattan** , although in a different country, and that **scylla** was saying much the same thing in the “There is no trust” thread, I think we can reasonably establish that **manhattan** ’s ignorant, stupid or lying (not a mutually exclusive list, btw) when he says that no one is suggesting that the SS obligations will be defaulted on. > Anyway, carry on. Could you show me where anyone has suggested that SS obligations will be defaulted on? Because other that RTF saying that that’s what Mr. Bush said and nobody agreeing with him, I haven’t seen anyone here make that claim. Do you have a link? ---
**Author:** ![Polycarp](https://avatars.discourse-cdn.com/v4/letter/p/82dd89/32.png) [@Polycarp](https://boards.straightdope.com/u/Polycarp)\ **Post date:** [February 19, 2005, 4:32pm UTC](https://boards.straightdope.com/t/manhattan-losing-touch-with-reality-and-following-in-libs-cryptic-footsteps/290691/94 "2005-02-19T16:32:53Z")
> [@Weirddave](#): > > Could you show me where anyone has suggested that SS obligations will be defaulted on? Because other that RTF saying that that’s what Mr. Bush said and nobody agreeing with him, I haven’t seen anyone here make that claim. Do you have a link? No, he has in fact never said that, and implied the contrary. It’s just that many of us, based on past performance, do not **trust** him – and if he raises an issue saying one thing, it’s _prima facie_ evidence, based on past political performance, that he’s likely to be saying something different in the near future. You need not agree with that assessment of his trustworthiness, of course. But I’d hope you can see why people without tinfoil hats might hold it. ---
**Author:** ![Squink](https://avatars.discourse-cdn.com/v4/letter/s/b5e925/32.png) [@Squink](https://boards.straightdope.com/u/Squink)\ **Post date:** [February 19, 2005, 4:48pm UTC](https://boards.straightdope.com/t/manhattan-losing-touch-with-reality-and-following-in-libs-cryptic-footsteps/290691/95 "2005-02-19T16:48:19Z")
> [@Polycarp](#): > > No, he has in fact never said that, and implied the contrary. It’s just that many of us, based on past performance, do not **trust** him – and if he raises an issue saying one thing, it’s _prima facie_ evidence, based on past political performance, that he’s likely to be saying something different in the near future. His proselytizing of private accounts as a cure for social securities’ troubles, when it’s not at all clear that private accounts would have any effect on the program’s solvancy, suggests to me at least, an underlying dishonesty in the president’s approach. That makes ‘trust’ impossible. A declaration on Bush’s part that he has no plans on his desk to default on the promise would _not_ be reassuring, as he’s already abused that particular figure of speech. ---
**Author:** ![Weirddave](https://avatars.discourse-cdn.com/v4/letter/w/919ad9/32.png) [@Weirddave](https://boards.straightdope.com/u/Weirddave)\ **Post date:** [February 19, 2005, 5:07pm UTC](https://boards.straightdope.com/t/manhattan-losing-touch-with-reality-and-following-in-libs-cryptic-footsteps/290691/96 "2005-02-19T17:07:13Z")
> [@Polycarp](#): > > No, he has in fact never said that, and implied the contrary. It’s just that many of us, based on past performance, do not **trust** him – and if he raises an issue saying one thing, it’s _prima facie_ evidence, based on past political performance, that he’s likely to be saying something different in the near future. > > You need not agree with that assessment of his trustworthiness, of course. But I’d hope you can see why people without tinfoil hats might hold it. Actually **Poly** , those sentiments seem to be coming from the people _wearing_ the tinfoil hats, but I see what you are saying. My point to **pantom** stands, however. ---
**Author:** ![pantom](https://avatars.discourse-cdn.com/v4/letter/p/34f0e0/32.png) [@pantom](https://boards.straightdope.com/u/pantom)\ **Post date:** [February 19, 2005, 6:27pm UTC](https://boards.straightdope.com/t/manhattan-losing-touch-with-reality-and-following-in-libs-cryptic-footsteps/290691/97 "2005-02-19T18:27:13Z")
Don’t read English much, do you? You know, you made the last post in that “There is no trust” thread a few days ago. So, here we go: [Post #17, where **Liberal** cites the following](http://boards.straightdope.com/sdmb/showpost.php?p=5822904&postcount=17): > [@](#): > > “The Federal budget meaning of the term “trust” differs significantly from the private sector usage…the Federal Government owns the assets and earnings of most Federal trust funds, and it can unilaterally raise or lower future trust fund collections and payments, or change the purpose for which the collections are used.” (Analytical Perspectives, Budget of the United States Government, Fiscal Year 2000 (Washington, D.C.: U.S. Government Printing Office, 1999), p. 335.) > … > “When the government issues a bond to one of its own accounts, it hasn’t purchased anything or established a claim against another entity or person. It is simply creating a form of IOU from one of its accounts to another.” (David Koitz, “Social Security and the Federal Budget: What Does Social Security’s Being Off-Budget Mean?” Congressional Research Service, May 5, 1998.) Further down, **Mr Moto** chimes in: > [@](#): > > If I write an IOU to you, you now have an asset. However, I can’t write an IOU to myself and call it an asset. All it would be is a sort of reminder. Yet further down, **scylla** delivers this: > [@](#): > > The OP here is that Bush sucks because he was full of shit when he said there was no trust fund. > Since there is, in fact, no trust fund this anti-Bush rant on those grounds is looking pretty grim. > The Op’s error is one of ignorance. He shot his mouth off without knowing what he was talking about. The situation, legally, is somewhat similar to that of the currency in the early days of the Republic. If you look at the Constitution, it has these two clauses: > [@](#): > > Section 8: > The Congress shall have Power…To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures; > … > Section 10: > No State shall… make any Thing but gold and silver Coin a Tender in Payment of Debts; From the second, one can infer that the Founders meant for money to be gold and silver, and [Federalist 44](http://www.yale.edu/lawweb/avalon/federal/fed44.htm) from James Madison makes this pretty clear: > [@](#): > > The loss which America has sustained since the peace, from the pestilent effects of paper money on the necessary confidence between man and man, on the necessary confidence in the public councils, on the industry and morals of the people, and on the character of republican government, constitutes an enormous debt against the States chargeable with this unadvised measure, which must long remain unsatisfied; or rather an accumulation of guilt, which can be expiated no otherwise than by a voluntary sacrifice on the altar of justice, of the power which has been the instrument of it… In addition to these persuasive considerations, it may be observed, that the same reasons which show the necessity of denying to the States the power of regulating coin, prove with equal force that they ought not to be at liberty to substitute a paper medium in the place of coin. Nevertheless, the clause giving the power to Congress doesn’t say anything about what the coins should be made of, nor are they expressly prohibited, as the States are, from issuing paper currency, thereby retaining flexibility, a flexibility which in those days was used to issue paper money in times of war, customarily. Nevertheless, the devaluation of the dollar in terms of gold by Roosevelt back in the Thirties was known as “The American Default”; even though the devaluation was strictly legal, it was not quite a confidence-building measure in the dollar, for obvious reasons, on the international stage. Pretty much the exact same situation occurs here with Social Security. There is no legal obligation to use the money set aside since 1983 for Social Security, but should these not be honored as obligations, the world will still see it as a default, as **Demo** shows. It would be legal, but it wouldn’t exactly inspire confidence on the world stage. These points are pretty commonplace conversations among people interested in financial matters, as the post from **Demo** points out, and as the thread you yourself participated in also shows. **manhattan** is, therefore, lying like a rug when he says that no one is suggesting there be a default, as are you, of course, when you say that you haven’t seen any such suggestion. Demonstrably, you have. The President, being the President, obviously can’t say the same things as what his supporters are suggesting, if for no other reason than that the dollar is on shaky enough ground without bringing this up. Quite obviously, his supporters have no such restrictions on what they can say. ---
**Author:** ![Sam\_Stone](https://avatars.discourse-cdn.com/v4/letter/s/ecccb3/32.png) [@Sam\_Stone](https://boards.straightdope.com/u/Sam_Stone)\ **Post date:** [February 19, 2005, 6:36pm UTC](https://boards.straightdope.com/t/manhattan-losing-touch-with-reality-and-following-in-libs-cryptic-footsteps/290691/98 "2005-02-19T18:36:20Z")
This is an issue on which I’m somewhere in the middle. I have my own worries about Bush’s plan, but they are worries that haven’t been mentioned by anyone to date. So I’m a pretty neutral party on this one. As such, let me see if I can sum up what I see as the issues, to see if we can’t pull everyone back on topic and get past all the innuendo and misunderstandings. As I see it, there are TWO debts we’re really talking about here: 1. The ‘hard’ debt - that being the money the SS administration has collected on behalf of retirees. That money has been spent, and what the SS administration holds now are government instruments promising the debt will be repaid. 2. The ‘soft’ debt - that being the promises the government has made that they never collected a nickel for. There are no T-bills to default on this one, because no money has ever changed hands on this. In other words, the government collected less money for SS than it should have to meet the promises it has made. No one disputes that the hard debt will be paid. NO ONE. Anyone suggesting that needs to provide cites to that fact. The soft debt is another matter. The government could choose to address that any number of ways - It could renege on its promises by cutting benefits that were promised, or it could cover the debt by borrowing money or raising taxes. Here are the real problems: Currently, the government funds a percentage of operations by borrowing the money that people are putting into the trust fund. That’s where the ‘accounting fiction’ comes in. There’s no real trust in the sense that the government could just draw from it when required without affecting anything else. Here are the crises that are on the way: 2018: The date at which the net inflow of money into the trust fund changes to a net outflow. The effect of this is to drastically reduce the government’s ability to borrow from its own people to fund operations. At this time, the government will have to start spending the interest earned on the trust fund to pay current retirees. 2028: The date at which interest revenues are no longer sufficient to maintain benefits, and the trust fund will have to be drawn down. 2043: The date at which the trust fund is exhausted, and the government has to start paying current retirees out of general revenue. At that point, the money collected from current workers will only cover about 72% of the benefits promised. So in 2043, either the general fund is going to have to pick up the 28% of the cost of all retirees in the country, or cut benefits by 28%, or some combination of the two. At each point, the government will have to continue borrowing by selling T-bills elsewhere, on the international markets. This could drive up interest rates and weaken the dollar. Or, the government will have to cut spending drastically or raise taxes. All three of these solutions will come with significant economic cost. As I understand it, in 2018 the government loses part of the ability to divert funds collected through SS into the general revenue. In 2028, it loses all of it. In 2043, it has to start paying out current retirees from general funds. Three consecutive economic shocks. And you can’t avoid those shocks by raising taxes, because tax hikes ARE an economic shock. There is just no way to avoid these problems - the money has been spent. The government cannot renege on the debt in the trust fund, but it can certainly renege on the promises made to the people. In other words, it could make that debt last longer by simply raising the retirement age, or means-testing SS, or by cutting benefits. This is where the ‘fiction’ part comes in. People who thought they were investing their money in a real trust are finding that what’s really happened is that they’ve paid a tax in return for a political promise. But at that point, the elderly will be the largest demographic group in the country, and by far the most powerful voting bloc. Good luck cutting their retirement benefits. What Bush wants to do is create an actual trust in the form of private accounts, and divert a small amount of money from current payers into it. Then the people are not reliant on government promises to get their money back, and that money is a real asset that can be passed on to children, etc. Sure, there are up-front costs, but that mainly amounts to transferring part of a big liability in the future to a smaller liability today, so that when the shocks come later on they are more mild. It’s like choosing to save for your retirement. The decision costs you today, because you have to divert some income into your savings. But the benefit is to lessen the shock of losing all your income when you require. ---
**Author:** ![FinnAgain](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/finnagain/32/12500_2.png) [@FinnAgain](https://boards.straightdope.com/u/FinnAgain)\ **Post date:** [February 19, 2005, 6:36pm UTC](https://boards.straightdope.com/t/manhattan-losing-touch-with-reality-and-following-in-libs-cryptic-footsteps/290691/99 "2005-02-19T18:36:33Z")
Oh my god, this is a hijack from hell. Let’s make this quick **Lib** > [@Liberal](#): > > You said nothing about situations. You bothered to single me out and ask me why I don’t embolden usernames, Um… persecution complex much? I was talking to you, you were talking to me, I noticed you didn’t bold names, so I asked you why, no ‘singling out’ required. Then your response was snarky and you suggested that you were totally unaware of such conventions, which I found odd for someone who’s been posting to the Dope for so long. > [@Liberal](#): > > your only purpose in bringing that up obviously was to demonstrate that I don’t respect other posters. The obvious reason I brought it up, oh great mind reader, was because I was curious why you didn’t do it. I even said just that when I asked you, that I was curious. In those exact words, in plain English, unable to confuse anybody who wasn’t looking to take offense. Zero implications. > [@Liberal](#): > > and then proceed to make a mountain out of the molehill of typing usernames in bold. Yes **Lib** , I am obviously very very very very worked up about this. In a tizzy. Frothing. Insane. Just bonkers. Yeep. I asked you a question, you replied with snark, I answered that I was surprised someone who’d been around so long was totaly unaware of such conventions. Grok? > [@Liberal](#): > > > [@FinnAgain](#): > > > > But then again, I’m sure you understand that society is thermoplastic and not thermosetting and that situations vary while there may still be statistically-valid-rules-of-convention? > > Gibberish. Which word confuses you? I assume you know what they all mean? Do you deny that society is thermoplastic instead of thermosetting? Do you deny that while societal conventions are statistically valid generalizations they do not hold for all specific instances? Or, is it just that you’re-being-fucking-annoying? > [@Liberal](#): > > The point — and you should know this because you brought it up — is about “nitpicking”. No **Lib** , I was talking with **Gaudere** and others about what, specifically, **Manny** did. My remarks were only valid in that (and similar) context(s). Then you attempted to nitpick a not-even-tangent and discuss what words meant when obviously the context of the discussion invalidated your responses. > [@Liberal](#): > > You are the veritable king of nitpickers, \ Hail to the king, baby. \ > [@Liberal](#): > > What’s the difference? Why should there be any difference between a mistake and a deliberation if there is no difference between an inference and an implication? You being perverse or just fucking-annoying again? There is a difference, and I’ve not said otherwise. The fact is, _in that situation_ **which for some reason you are deliberately ignoring** , an inference was voiced and thus became an implication. > [@Liberal](#): > > The sheer laziness of your argument is tedious to the extreme. To each their own. Personally I find the ridiculous tight assed pedantry of your totally off topic nitpicking to be tedious in the extreme. > [@Liberal](#): > > It’s like you know two words: nitpick and hijack. It’s like you love two activities, nitpicking and hijacking. > [@Liberal](#): > > Any and all responses to you are met simply with, “You’re nitpicking” or “You’re hijacking”. Notice that we’ve now taken this thread, if we continue this discussion, into a total non-tangent that focuses on minutae. In other words, it’s a nitpicking hijack. > [@Liberal](#): > > You had clearly confused the words “infer” and “imply”, even admitting so with a smackie. Are you mistaken, or lying? Cite for where I admitted ‘confusing’ a single damn thing? _In the specific situation we were discussing_ an inference (eg. you either agree with me you’re either a) lying b) a clinical idiot) was voiced. That made it an implication. But sure **Lib** , I’m obviously confused about basic English and, good gods, I need you to show me the light! Please! Wise and Powerful **Lib**! **Liberal** , The Great and Terrible, save me from my flawed and not as perfect as you self! ~sighs~ Context, context, context. > [@Liberal](#): > > And now you want to do a moon-walking backtrack while displacing your faux pas onto me by accusing me of going off-topic. I’m not backtracking, I’m not retracting, I’ve said nothing different, I’ve not made the strawman you’re trying to attribute to me (that there is a one-to-one correlation beween infer and imply). And, this entire discussion, which you started and I was foolish enough to engage in, is off topic. > [@Liberal](#): > > It’s as though you’ve pulled someone into the swimming pool, and then told others that he threw you in. Sure **Lib** , I forced your original off topic nitpicking points. I forced you! It’s my fault. Your behavior, it’s my fault. I am so sorry. Please accept my heartfelt apologies. > [@Liberal](#): > > No, it isn’t. Your lame attempt to summon a pile-on is beneath even you. You’re-being-fucking-annoying. You will notice, **Lib** , I’m quite capable of handling you all by lonesome and I certainly don’t need help from anybody else. Nor would what I said be construed by anbody _without a persecution complex_ as calling for a dogpile. > [@Liberal](#): > > Deal with the argument at hand, or else go back to MPSIMS, where you can make up more board rules about bold letters and such. There are so many things wrong with this that I don’t know where to start. I’ll just say 23 skidoo and leave it at that. > [@Liberal](#): > > I took it exactly where it belonged: explaining to you the difference between an inference and an implication, and even sharing with you how I remember them. Luckily, nobody, **Lib** , could possibly know what those words meant without you. I mean, how on earth would I have known what those words meant if you didn’t tell me? Boy, after I got my BA in English with honors, I just wasn’t prepared for the world, and especially not to interpret text. Luckily you’re here to define words for me. > [@Liberal](#): > > That was while you were congratulating Elucidator for his “I pay taxes” rejoinder — apparently satisfied with some hijacks but not others. While there is, of course, some wiggle room, I feel that a ‘hijack’ has to consist of, in general, at least four or more posts, otherwise the thread doesn’t become hijacked. This is of course a rough n’ ready rule rather than hard n’ fast. In general, ‘you know a hijack when you see one.’ Or rather, almost everybody else does. You seem not to. My complimenting **Elucidator** on making a funny joke was not a hijack. Notice, we didn’t discuss taxes, jokes, or anything else after that. It was a throwaway compliment and certainly not a hijack. > [@Liberal](#): > > You didn’t appreciate what I shared, and now you’re flailing all about with a bunch of nonsense. Just stop it. I like you, you’re silly. Anyways, you can wrap this hijack up if you want. I’d rather not dominate this thread with a debate upon your actions in this thread and how you’re approacing off topic minutae. You have the floor **Liberal** ---
**Author:** ![Shodan](https://avatars.discourse-cdn.com/v4/letter/s/9f8e36/32.png) [@Shodan](https://boards.straightdope.com/u/Shodan)\ **Post date:** [February 19, 2005, 7:28pm UTC](https://boards.straightdope.com/t/manhattan-losing-touch-with-reality-and-following-in-libs-cryptic-footsteps/290691/100 "2005-02-19T19:28:21Z")
> [@RTFirefly](#): > > So when I accuse Bush of implying that the money won’t be there to pay back the loans from the Trust Fund, and in that context I bring up the Fourteenth Amendment, you’re saying that I’m accusing Bush of preparing to welsh on _the entire national debt_, rather than just the portion owed to Social Security. No, you are accusing Bush of violating the Fourteenth Amendment. The Fourteenth Amendment does not exempt Social Security from being questioned. “Entire” vs. “partial” doesn’t enter into it, except as you are attempting to throw up some dust and cover up the fact that you are telling direct and easily apparent falsehoods. Once more, Bush has never stated or implied that the debts of the US government are not going to be paid back. Your accusations that he has are simple falsehoods. > [@RTFirefly](#): > > Y’know, defending what I’m actually _saying_ is enough work here, without having to deal with all these absurd misreadings. Now you know what Bush feels like dealing with the likes of you. > [@RTFirefly](#): > > It isn’t the best I can come up with; I assume it must be the worst, because it’s exceedingly rare that I find myself in this numerically lopsided a battle. Well, you aren’t usually this big a moron. It isn’t a habit we would like to see you get into. Regards, Shodan [Previous page](https://boards.straightdope.com/t/manhattan-losing-touch-with-reality-and-following-in-libs-cryptic-footsteps/290691.md?page=4) [Next page](https://boards.straightdope.com/t/manhattan-losing-touch-with-reality-and-following-in-libs-cryptic-footsteps/290691.md?page=6)