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[tvoivozhd <tvoivozd AT infionline.net>]

Clansgian AT wmconnect.com wrote:

> In a message dated 2/5/2005 7:25:17 AM Eastern Standard Time, 
> genegerue AT ruralize.com writes:
>
>
>  
>
> > > You seem to think that the very last geezer is going to get their full
> > > measure of SS right up until the US goes bankrupt.
> > >      
> > Please do not put words into my mouth. I have offered my views. You are 
> > welcome to disagree.
> >    
>
> Not this time, Gene.  I only said "seem to say" out of decorum.  That's what 
> you've repeatedly said.  To wit:  Whenever anyone points out that the "trust 
> fund" had no money in it, you follow with the saw that it doesn't matter if 
> there's no money in it, the money is de facto there until the US goesbankrupt.
>
> The 'trust fund' is an IOU the government has written to itself.  It can 
> resolve it, if it chooses, by crumpling it up and throwing it away ... exactly as
> you could do if you found an IOU in your pocket written by yourself to 
> yourself.  A change in political climate might produce just those results.
>
> James
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>  
tvoivozhd---the Social Security IOU's and the IOU's and the IOU's to 
China, Japan and Saudi Arabia are all Federal bonds.  Congress can and 
probably will pass legislation to lower S.S. benefits coupled with some 
real or imaginary carrot---but it will not
selectively cancel existing bonds which all other bondholders would 
interpret as forerunner of default on their bonds.. 

It would be interesting to watch this scenario, but unless the U.S. has 
an economic meltdown like the Soviet Union whose military budget 
suffocated the economy, it isn't going to happpen (though our military 
budget is dangerously suffocating)The juice is temporarily turned off 
the S.S. "Third Rail", but Bush and Congress are going to be VERY 
careful not to depart from political reality and turn the juice back on 
to electrocute them politically.

And they are going to be equally careful not to further alarm the 
already alarmed China, Japan and Saudi Arabia---brings to mind the 
Weimar Republic and people wheeling around a wheelbarrow full of 
worthless paper currency to buy a loaf of bread.