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View Diary: No Cuts to Social Security, Medicare and Medicaid (173 comments)

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  •  You cannot "save" money this way (0+ / 0-)

    The Boomers did not suffer any reduction in their purchasing power due to "saving" this money, because the money's removal from circulation resulted in deflation.

    If the trust fund had purchased some other asset (like foreign bonds) this would not be an issue, but since the bonds were US bonds there was no sacrifice of purchasing power by the boomers. No money was "saved".

    Like I said, it would be more honest to never have had a trust fund and just pass a tax increase to cover the boomer's expanded needs. As it is, redemption of the fund is a sneaky way to take purchasing power from younger workers via inflation and increased general fund taxes.

    (-5.50,-6.67): Left Libertarian
    Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

    by Sparhawk on Fri Nov 04, 2011 at 11:00:25 AM PDT

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    •  WTF? (5+ / 0-)
      If the trust fund had purchased some other asset (like foreign bonds) this would not be an issue...

      What's wrong with "buy American"?  Foreign bonds are safer?  Actually T Bills are the safest bonds world wide.

      There already is class warfare in America. Unfortunately, the rich are winning.

      by Puddytat on Fri Nov 04, 2011 at 11:02:54 AM PDT

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      •  It isn't a question of safe (0+ / 0-)

        By buying dollar-denominated assets, the trust fund created a situation in which the boomers didn't lose any purchasing power in exchange for their 'savings', because the money was just removed from circulation and price deflation occurred. Because of this dynamic, the redemption of the trust fund is basically a tax increase on younger workers in the guise of inflation.

        By buying foreign bonds, it would have required the boomers to generate exports in exchange for their retirement savings. Then, they can import to cover the differential when they retire (of course, they are at risk of sovereign default in that case as you point out).

        (-5.50,-6.67): Left Libertarian
        Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

        by Sparhawk on Fri Nov 04, 2011 at 11:14:40 AM PDT

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        •  You're arguing in circles (1+ / 0-)
          Recommended by:
          3goldens

          without legitimate points.  I'm done responding to what is looking like a disruption of the commentary flow.  I'm done.

          There already is class warfare in America. Unfortunately, the rich are winning.

          by Puddytat on Fri Nov 04, 2011 at 11:22:45 AM PDT

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