To: "homestead AT lists.ibiblio.org" <homestead AT lists.ibiblio.org>
Subject: [Homestead] Photo op to bash Social Security
Date: Thu, 07 Apr 2005 07:14:38 -0700
Imagine this: On his next trip to Japan, President Bush visits the vault at
the Bank of Japan, where that country's $712 billion in United States
government bonds is stored. There, as the cameras roll, he announces that
the bonds, backed by the full faith and credit of the United States, are,
in fact, worthless i.o.u.'s. He does the same thing when he visits China
and so on around the world, until he has personally repudiated the entire
$2 trillion of United States debt held by foreigners.
Mr. Bush rehearsed just that act on Tuesday, when he visited the office of
the federal Bureau of Public Debt in Parkersburg, W.Va. He posed next to a
file cabinet that holds the $1.7 trillion in Treasury securities that make
up the Social Security trust fund. He tossed off a comment to the effect
that the bonds were not "real assets." Later, in a speech at a nearby
university, he said: "There is no trust fund. Just i.o.u.'s that I saw
firsthand."
Social Security takes in more money than it needs to pay current
beneficiaries, and the excess is invested in the Treasury securities that
Mr. Bush was discussing. They carry the same legal and political
obligations as all other forms of Treasury debt, every penny of which has
always been paid in full and on time.
In his speech, Mr. Bush went on to acknowledge that future generations
would have to make good on the debt. But the intended meaning of the
photo-op was clear. In the hope of persuading people to privatize Social
Security - a move that would only add to the growing debt burden for future
generations - Mr. Bush wants Americans to believe that the trust fund is a
joke. But if the trust fund is a joke, so is the full faith and credit of
the United States.
Fortunately, the governments, institutions and individuals who hold United
States debt can tell a publicity stunt from a policy statement. Still,
casting aspersions on a basic obligation of the United States government is
insulting and irresponsible.