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View Diary: Newsweek Promotes A $2.6 Trillion Social Security Fraud (63 comments)

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  •  But does this "special" status (0+ / 0-)

    make them in any way more easily defaulted on, in part or whole, directly--meaning not via the indirect means of cutting benefits such that they will in effect never have to be paid back in part or in full--from both a legal and financial point of view (i.e. meaning that doing so wouldn't or at least shouldn't adversely affect the US's credit rating, because these would be "special" defaults that wouldn't apply to "regular" t-bills and other debt obligations)?

    Because if the answer is no--and I suspect it is--then the term "worthless IOU's" becomes even less valid (as if that's possible).

    "Those who stand for nothing fall for anything...Mankind are forever destined to be the dupes of bold & cunning imposture" --Alexander Hamilton

    by kovie on Mon Mar 07, 2011 at 03:38:47 PM PST

    [ Parent ]

    •  No. (2+ / 0-)
      Recommended by:
      wsexson, vigilant meerkat

      Congress can declare war on Switzerland if they want. Quite apart from the 14th Anendment argument advanced below, the notion that a straight out abrogation of Special Treasuries would pass either a political or legal test is fantasy.

      Congress or even your local municipality can confiscate your property, pay you what they think it is worth, and turn it over to a private developer. And if that developer drops their plans you have no recourse: Google Kelo v New London. People who think 'ownership' is a stronger bulwark than the protections built into the various Social Security Acts are living in a fantasy land of fetishment of 'property'.

      The argument that Special Treasuries are legally, practically, politically, historically, or as pointed out constitutionally subordinate to regular Treasuries is just bullshit special pleading in pursuit of a pre-determined conclusion.

      Unless of course if workers/voters buy the con.

      Please visit, follow or join our Group: Social Security Defenders

      by Bruce Webb on Mon Mar 07, 2011 at 04:27:29 PM PST

      [ Parent ]

    •  The difference has to do with the money supply (0+ / 0-)

      and an accounting sleight of hand.

      If the government issues Treasuries like the kind you and I buy, it adds to the money supply. If you add to the money supply in $50 to 100 billion increments over 25 years, it's not a shock to the financial system. And when those Treasuries are converted into cash to pay out social security benefits, the money supply does not change.

      Special Securities do not add to the money supply, which is why the government can claim that current SSA surpluses reduce the current operating deficits. But if you have a $2.6 trillion in SSA benefit obligations that need to be paid out over a decade, the money supply will need to be increased at a much faster rate when those benefits come due.

      It is definitely a major financial concern. But Samuelson perverts history by claiming that the shortfall was caused by something other the fiscal recklessness of the GOP tax cuts.

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