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View Diary: Fiscal cliff discussions break down after Republicans demand Social Security cuts (249 comments)

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  •  NO expenditure... (0+ / 0-)

    ..."raids" the SS Trust Fund.

    The Trust Fund invests in US Securities. If that's a bad idea, we just need to change the law so they can invest in other things (perhaps the next AIG, or the next WebVan, or Apple, or Zynga) and can't invest in US Securities. The Treasury will just put those bonds up for auction on the open market to be bought by other investors (yes, it probably will cost us a bit higher interest -- resulting in us have to temper expenditures somewhat).

    It wouldn't impact the debt one bit except to the extent that the increased cost of servicing the debt due to higher interest rates would cut into funds available for various government programs. If US Securities are a bad investment due to risk of default, it's probably too late to save our economy anyway and we need to go to China to ask for their help and see if perhaps we can merge SS with their old age retirement system in exchange for letting them appoint a supermajority to the House and the Senate.

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