On 12/17/2012 2:13 PM, Stephen P. King wrote:
On 12/17/2012 2:30 PM, meekerdb wrote:
On 12/17/2012 10:14 AM, Richard Ruquist wrote:
In addition the United States has been borrowing from what we own. Our
indebtedness to ourselves from borrowing from the Social Security Fund
that was set up in Reagan's Administration is double our indebtedness
to China for example. My perspective is that the fund is a Republican
means to limit the effectiveness of Social Security. It's against the
law to borrow from it but that has not stopped the borrowing.
It's not against the law. It's exactly the opposite. The law as set up in 1934
requires that any SS surplus be invested in Treasury Bonds, i.e. loaned to the U.S.
government. This was very sensibly set up so that the SS would not be influencing the
stock market by investing (picking winners and losers). The SS trust fund is always
held as Treasury Bonds. That has no effect on the debt. If the government weren't
loaned that money it would just have to borrow from somewhere else. And it doesn't
mean SS is broke. SS built up a surplus in anticipation of the baby-boomers retiring.
Now it's paying out the surplus and the Treasury will have to borrow from elsewhere or
tax to meet it's bond obligations (to SS and every other bond holder).
Right, money what "we owe to ourselves" is not debt.
Pay attention. I didn't say there was no debt. I said the SS trust fund was not in
debt. It's a creditor. The Treasury, from whom SS bought bonds, is the debtor.
LOL! You sir, simply have no idea how real world economics works. Value that is tied up
in debt is value that cannot be invested, reducing the available monetary resources
available for an economic system. Debt is exactly like "negative mass". With a little of
it you can make worm holes and jet around as Master of the Universe, but eventually it
will destroy your universe.
I know enough economics to see that you haven't a clue. The debt represents money that
was spent and not replaced by taxes. When it was spent it may have been invested - as in
loaning money to the auto industry, or in conquering some oil-rich mideast country, or
paying for my friends artificial knee. Whether it was spent wisely or not, it was
spent/invested; the government certainly didn't just sit on it. And because it was spent
it had to come from either borrowing or taxation.
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