No. of Recommendations: 0
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.


Print the post  


The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.