The Motley Fool Discussion Boards

Previous Page

Politics & Current Events / Current Events

URL:  http://boards.fool.com/quotwhy-are-social-security-and-medicare-being-30414360.aspx

Subject:  Re: fiscal cliff Date:  12/4/2012  11:50 PM
Author:  Howie52 Number:  174931 of 176193

"Why are Social Security and Medicare being included in these negotiations. "

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

First question: What negotiations?

Second question: What is different compared to when the "cliff" was
part of the negotiations to increase the debt ceiling limit? Other
than extraordinary additional debts?

Third question: What do you feel is the impact of the Fed buying our
own bonds?

Fourth question: What is the difference between an expenditure that
is paid by government sale of bonds to repay obligations incurred
from prior dealings and any other "bond" payment?

Fifth question: What did the bondholders holding GM debt get back
of their principle?

Sixth question: What are the Greek bondholders likely to get from their
holdings?

Seventh question: What level of debt do you suppose will constitute
the level where there will never be a serious ability to pay back the
principle?

Howie52
A thumbnail sketch -
Government obligations require a commitment of funds - of revenue.
If these commitments are not funded - someone is left holding the
bag at some point.
Bonds pay interest to account for risk to principle - but
bond yields are being "artificially" fixed such that the inherent
"risk" is not covered.
This is not a stable approach.
Unstable approaches fail.
If the government continues in the current path, the government
will fail.
There is no social security if the government fails.
Copyright 1996-2014 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us