On 4/27/2011 4:51 PM, Doug Henwood wrote: > The benefits are entirely sustainable, but the rest of this is true. > When the bonds are redeemed, the Treasury is going to have to come up > with the money somehow - either raising taxes or borrowing more. > Either that, or cutting benefits. How can the Treasury borrow from > itself? How can you left pocket lend to your right pocket? It's > insane.
My argument is that since FICA/payroll is a separate tax and SSA is legally prohibited from borrowing to make payments, it isn't the same as the Treasury lending to itself. So if we raise taxes (increase taxmax for FICA and increase the rate if necessary to get the right's support) we can cover current payments but also start lending back to Treasury. So really it is like all the workers in the country work for one company, GigantoCorp. We pay into a pension and the only way pensioners receive benefits is from that pension. For a while we ran a surplus so we bought T-Bonds - nice and safe. The gov't used our lended money to build us schools and roads (forget the bombing brown folk part). Now so many have retired from GigantoCorp we need to start cashing the bonds. The US Gov't could sell regular bonds to cover making payments to GigantoCorp's pension fund bonds. But! Another option is that the workers at GigantoCorp agree to kick in more money to the pension. Not only would the pension be able to make all its payments, it could again lend to the Treasury and they could build another generation's worth of bridges and schools. Matt -- GnuPG Key ID: 0xC33BD882 aim/google/MSN/yahoo: beyondzero123 _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
