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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