Homestead mailing list

[Clansgian AT wmconnect.com]

In a message dated 4/7/2005 9:29:11 PM Eastern Standard Time, 
mmcharry AT dtnspeed.net writes:


> Every debt is just an IOU, 

No.  And if Bush is finally saying this out loud and often enough, maybe it 
will eventually sink in on enough people.  Every debt is NOT just an IOU.  
Your 
mortgage is not just an IOU.  If you default on it, the creditor can 
foreclose and take the property.  That is, it is secured by a REAL asset.  
Likewise 
most loans and by far most loans of any consequence.  Even loans, such as 
most 
credit card debt, which are not secured by real assets are done with the 
understanding that there will be a definate repayment schedule.  Contrast 
this to 
giving a friend or relative a sum of money in exchange for an IOU that will 
be 
paid back some unspecified time in some unspecified manner.  You carry the 
IOU 
around in your pocket hoping someday when you need the money, the friend will 
be able AND willing to cough up the money.  THAT's what the treasury notes 
that back up the SS system resemble.  No plan, no schedule, no understanding 
as 
to what is to happen when (in 2017 or sooner or much sooner) SS is no longer 
taking in as much is it is obligated to disburse, only those notes that say 
in 
some vague way the US is responsible for coughing up that much extra money.

What happens when you really need the money back and you track down your 
erstwhile friend and demand payment, yet you find him going through hard 
times 
himself and unable to pay?   All the grabbing him by the ankles and trying to 
shake the money out of him would be to no avail.  Likewise when the SS needs 
to 
cash in some of those treasury notes to pay its obligations, the US 
government 
must go one of the only two sources it has for revenue:  shake it out of the 
taxpayer or borrow more money.  What happens if at that time the taxpayers 
are 
having their own hard time and nobody wants to buy any more US debt (since 
they already have a closet full of it)??   That's why it's just and IOU and 
not 
like a regular debt of any kind - it is not secured (not backed by any 
assets) 
and there is no agreement, plan, or schedule as to how the money is to be 
paid 
back.



James