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Posted: 5/2/2011 1:53:43 PM EDT
Right now, the Feds are playing shell games with .gov debt to keep things going until August 2nd:  http://www.bloomberg.com/news/2011-05-02/u-s-to-hit-debt-limit-no-later-than-may-16-geithner-says.html

The Republicans and maybe some fiscal conservative Democrats want spending cuts and budget discipline tied to an increase in the debt ceiling, which while it's a little late to reign in Federal spending is at least a nice gesture.

Here's how Obama and the Dems could do an end run around them and free up enough "available debt" to spend even more:

Everyone knows that the Social Security Trust Funds (and related .gov funds) are simply accounting frauds.  There is no value in those "trust" funds.  Once the SSA needs to start drawing down those non-negotiable federal securities to pay social security/medicare benefits, they will go to the Treasury to redeem them.  As the Treasury is broke, they can only do three things to redeem those securities:
 1.  Raise taxes and increase revenues to pay them off
 2.  Cut spending in another department and divert those funds
 3.  Sell more T-bills and bonds in the open market, to be purchased by the public or the Fed as a last resort

As such, those securities have no intrinsic value, are not in a "lockbox" and are an accounting gimmick to mask from the lazy public that politicians have stolen about $4 trillion in their so-called retirement funds and spent them on other things.

The money to pay future SSI / Medicare benefits will only come from three sources as described above - new taxes, diverted current spending or more public debt.  The trust fund securities are simply an extra (and unnecessary) step in the process.

As such, if Obama (under the guise of fiscal accountability or "bringing honest accounting to the .gov books") simply invalidated and canceled those $4 TRILLION in securities, they'd have $4 trillion in freed up credit lines on the current debt ceiling and wouldn't have to fight with the Republicans or cave in to their spending cut demands.

Of course, this would require that he come clean about the decades of politician theft and duplicity, as well as endure the howling of financially illiterate rabblerousers who would claim that he was stealing people's retirement funds.

So, argue, debate, call me names, divert my thread off on a tangent to howler monkeys - whatever you feel like.  It is after all, GD.


Link Posted: 5/2/2011 1:56:28 PM EDT
The seniors would kill 'em.
Link Posted: 5/2/2011 2:00:04 PM EDT
1. That would be a default.
BHO could not blame the Republicans for that default under your scenario.
2. He doesn't have the power to "invalidate and cancel" the gov't bonds held by the Socialist Security Administration.
Link Posted: 5/2/2011 2:04:13 PM EDT
Did you say free howler monkey to the first hijack post?
Link Posted: 5/2/2011 2:24:46 PM EDT
Originally Posted By Joe731:
Did you say free howler monkey to the first hijack post?


Step right up and claim your prize from the top shelf!

Link Posted: 5/2/2011 2:25:50 PM EDT
Originally Posted By POLYTHENEPAM:
1. That would be a default.
BHO could not blame the Republicans for that default under your scenario.
2. He doesn't have the power to "invalidate and cancel" the gov't bonds held by the Socialist Security Administration.


The .gov has long since abandoned the need to have "authority" or "legal power" to do something before they act.  This is no different.  The laws are for us, not them.

Link Posted: 5/2/2011 2:49:53 PM EDT
Originally Posted By DonS:
The seniors would kill 'em.


That is what the death panels are for!
Link Posted: 5/2/2011 5:17:51 PM EDT
canceled those $4 TRILLION in securities

Cancelling those securities will lead to war with China and we really don't want that but maybe Obama does.




Impeach Obama for the Good of the Chinese.
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