Today Bush staged a photo op at the little known Federal Bureau of Public Debt to make a point about Social Security. The thrust is that the Social Security trust fund is, in reality, merely a file cabinet full of IOU’s. Every now and then the privatization forces trot out this old turkey and other have done a better job than I could of debunking their claims. That said, I’m going to try and point out how completely ridiculous those claims are.
First, as any Heritage Foundation lackey will admit, the SS trust fund, like all US Treasury IOU’s, is backed by the, “full faith and credit of the U.S. government.” If Bush were actually proposing the US government, heretofore the safest investment in the world, default on a loan the consequences would be enormous.
This is why the whole project is so sleezy. If Wall St. and foreign investors believed that the United States is preparing to stiff its creditors, there would be a rush to pull money out of the US government and a major financial crisis for the markets and the government. But that’s not happening, even though the president has told us in no uncertain terms that when your Social Security check is supposed to come, the government will send you a default notice instead. Why isn’t Wall St. panicking? Why aren’t the Japanese rushing to divest of the dollar? Because they believe, and are willing to bet large sums, that Bush is bluffing.
And here’s why the tactic is stupid. Because in modern America, most of us have our money held up in IOU’s from the bank. I don’t think I’ve ever had more than several hundred dollars in my possession at once, yet I’m fairly certain the money isn’t about to go away any time soon. A file cabinet full of IOU’s just aren’t as viscerally scary as the president would like.
And here’s a reason to be outraged. If, as the pres sez, the trust fund is empty because, “government spent it.” Then can’t it be argued that government, of which Mr. Bush is presently the leader, gave it away in tax breaks? A couple years ago Bush looked at the budget forecasts and said to himself, it is more important to cut taxes than to honor the debt to American seniors and future seniors. He’s telling us some guy named George W. Bush spent all your retirement money and if I see him I’ll let you know. Laughable.