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|Subject: Re: Even SS does better than this||Date: 1/4/2005 10:50 PM|
|Author: 3muttsmom||Number: 43877 of 75793|
but the government "borrows" from it and writes worthless checks
Actually, I read an interesting article in the NYT today by an economist. He considers this to be the number one misconception re: SS. These "worthless checks" are, in fact, US Treasury Bonds. The same bonds Fools purchase every day for a portion of their Efunds. The same bonds the US is selling to other countries to prop up our deficits. The same bonds the entire world considers to be 100% safe.
Now, his contention is that there is only one way that the system crashes before 2042, when all these "worthless checks" will have been cashed to plug the shortfall holes after 2018. The government reneges on its debt.
Stop and think about this. Is it likely that the government would refuse to honor the bonds payable to its own citizens and honor those owned by third party countries? What politician would do this?
Likewise, how likely is it that the government is going to crash the entire world economy by allowing its debt to be downgraded to worthless via refusing to honor the trillions of $$ of bonds held by other nations?
This is apparently a first installment of a, I believe, three part series where he puts forth his idea of how to fix things.
I'll be interested to see where his argument goes from here.
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