There is no investment when it comes to government trust funds. T-bills or other government instruments amount to taking the people’s money out of one pocket and putting it in another. The money in the trust fund still gets spent like any other money the government has. There is no interest earned on money kept in Social Security accounts. Study your annual report from SS if you don’t believe me.
That trust fund for the Iraqi oil is no different. It’s just money in the government coffers. Iraq will always have to come begging to the US government from this point onward to get their money from their trust fund. That’ll make ’em happy, right? Don’t ya’ll listen to Patrick Timpone? He’ll explain it all to you if you do.
The promise to pay is irrelevant because the government can just:
- Print more money. They do it all the time. Create more debt, generate the t-bills that represent the debt, multiply the dollar figures on the T-bills x9 and voila, there is more money to dilute the money already in circulation. This is a simplified version of how inflation occurs and why a dollar is worthless (it represents no value outside of the system it is part of) The problem is, the Fed has already diluted the purchasing power of the dollar to such an extent that further dilution of the scale required to keep Social Security afloat might destabilize the federal money system itself.
- Write new laws that change the Social Security contract; arranging it so that you never were entitled to the money in the first place and so consequently you aren’t being denied anything you are due. They have done this several times already and I daresay we haven’t seen the last of it yet. Look to see the drug benefits altered in the near future.
The only solution is to remove responsibility for retirement welfare from the government altogether. I’m not certain what shape the new retirement system should take. It’ll have to include those who are currently drawing on the system as well as those who have paid in and expect to draw in the future, or it won’t be acceptable to enough people that it stands a chance of passage. Individual contributions should be kept in accounts accessible and controlled by the individual himself. There should be an additional ‘insurance’ feature that would cover expenses beyond the contributions of the individual. Perhaps a general welfare type health/retirement/disability all in one account is what is needed.
All I know is that it’s past time to fix the problem. The complete crash of the American financial system (what they really mean when they talk about Social Security failing) isn’t that far off. 30 years at most.
This was another thread deleted by the fine folks moderating KLBJ-AM’s forums. I frequently wondered what the point of maintaining a forum on the radio station’s website was. Then they and everyone else pretty much stopped doing that. Turns out that if you have a message system where people can attack each other anonymously people will create a Hell on Earth out of each and every one of those places. It’s almost like Elisabeth Cornwell knew what she was talking about.
I kept waiting for myself to drop the other shoe reading over this one. I was making too much sense at the beginning. I knew it couldn’t last. Then I go on to describe a system that is basically the system we have now, it’s just that I didn’t know what the hell I was talking about then. The system still needs rescuing. It’s still going to fail soon, but then isn’t it always just about to fail? Until it really does fail?