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View Diary: The Shock Doctrine (Act II): Debt Default Crisis (16 comments)

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  •  So how does this work? (0+ / 0-)

    "Of course the government will have enough money to pay the monthly Social Security checks. The Social Security administration has its own savings – in Treasury bills."

    Treasury bills are debt instruments.  How can they be used to pay social security benefits?  Wouldn't they have to be sold to be liquid?  I am thinking that right after the US defaults on its debt isn't going to be the best time to unload some T-bills.  

    Could you please explain to me what exactly this means?  I am not saying I don't believe it but I certainly don't understand it.  

    •  There were some disagreements (1+ / 0-)
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      with that part in the comment section at Naked Capitalism.  There were questions about liquidity--worth reading.

      •  And also (1+ / 0-)
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        The US government will never default on its bonds, because the bonds, unlike those of Greece, Spain, and Ireland, are payable in its own currency. Regardless of whether the debt ceiling is raised, the Federal Reserve will continue to purchase the Treasury’s debt.  If Goldman Sachs is too big to fail, then so is the US government.

        Paul Craig Roberts -- Assistant Secretary of the US Treasury, Associate Editor of the Wall Street Journal, and professor of economics in six universities.

        •  Sorry but I still don't understand (0+ / 0-)

          Are you saying that the fact that we have our own currency means that we can continue to buy t-bills back without limitation?  I would also think that if our credit is downgraded, which has nothing to do with our currency, that the t-bills would decrease in value.  This seems like a very limited and temporary solution at best.  

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