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View Diary: Should Americans Forgive the $2.5 Trillion Borrowed From Social Security? (181 comments)

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  •  You have a fundamentally mistaken view of "money" (4+ / 0-)
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    katiec, databob, leftreborn, Calamity Jean

    It doesn't exist, as a real thing, and hasn't since we started using fiat currency. It's something the Fed creates out of thin air to match what it believes is the true value of everything in the US economy, including foreign holdings, and so it doesn't need to "be there" for SS to draw on it.

    A T-Note that SS or any other T-Note-bearing entity has legal claim upon is, from a monetary point of view, about as real a claim on "money" as it gets. It doesn't matter whether the govenment "has" the "money" it represents. It will find it, one way or another, whether in its "holdings", or by taxing, borrowing or "printing" it.

    The entire US monetary system, and really the global monetary system that is built upon it, relies upon the honoring of such Treasury instruments, and the belief that they will ALWAYS be honored, which they ALWAYS have been. Were the US to someday not do that, we'd have vastly bigger problems than SS being short on money. We'd have a global monetary collapse the likes of which we haven't seen since the early 30's. I.e. Monetarygeddon.

    But as for SS, I wouldn't worry at all. The money that's owed to it in the "trust fund" is "there", and always will be so long as the US monetary system is sound. Anyone claiming otherwise either doesn't know what they're talking about or is lying to frighten unwitting dupes to convince them that SS really is a Ponzi scheme. Which it isn't, of course.

    "Liberty without virtue would be no blessing to us" - Benjamin Rush, 1777

    by kovie on Mon Dec 03, 2012 at 06:41:10 AM PST

    [ Parent ]

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