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  • From: tvoivozhd <tvoivozd AT infionline.net>
  • To: homestead AT lists.ibiblio.org
  • Subject: Re: [Homestead] Gambling with retirement monies
  • Date: Sat, 05 Feb 2005 15:34:51 -0500

Clansgian AT wmconnect.com wrote:

tvoivozd AT infionline.net writes:



---but it will not
selectively cancel existing bonds which all other bondholders would interpret as forerunner of default on their bonds..


Of course it won't. Saying so is simply the antithesis of notion that that because SS benefits are backed by the taxing power of the US government, the benefits will go on unabated no matter what right until the US goes bankrupt. Both scenarios are equally unlikely. But recognizing that the Congress HAS the power to ignore the IOU's if it likes, how much more then does it have the power to severely modify those IOU's without appearing on the surface to compromise them?
For example, what if someone had retired in, say, 1955. Would they necessarily have expected on SS to maintian a car, have air conditioning in their house, been able to afford twelve prescription drugs, expected to have convenience food available for them, cable television (wide screen)? The reason they would not is that those things weren't givens back then. Some didn't even exist. No one expected them. Fact is, if all seniors lived as seniors lived back in 1955 (say), the SS payment they receive now would look like a lot of money. What people consider the necessities is going up all the time. What I expect to see is SS continuing pretty much it is now, but it will buy less and less of what is considered a minimal standard of living. Then the government could say, "Hey, we've kept our promise! Just because what we promised isn't worth anything anymore isn't something we promised, is it?"

7th
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tvoivozhd---the one wild card in the deck is the national economy---if it drops drastically for any reason, and a lot of factors could bring it about (oil, biological, dirty nuclear attack,1918-type flu pandemic, failure of knowledge-based business to replace the lost revenue of a hollowed-out manufacturing business) few government obligations of any kind could be met. I have no faith in the "it can't happen here" mantra---I remember 1929 too clearly, lost $30,000 of silver-backed Dominican Pesos when the U.S. State Department leaned on Balaguer to dishonor them when young Trujillo fled with a boatload of them.

I view being free of debt on a mildly isolated piece of land possessing what I regard as essential (water, wood, some pasture and garden area. a few usable buildings) as a reasonably good insurance policy during what the Chinese describe as "interesting times".





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