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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: RealMuLan who wrote (19117)	12/20/2004 6:34:28 PM
From: RealMuLan	Read Replies (1) of 116555

Security Flaws Republican privatization plans are more than a threat to Social Security -- they're a threat to national security. By Paul Starr Issue Date: 01.04.05 Republican plans to privatize social security raise two different security questions. One is the impact on the retirement security of workers if they become dependent on the stock market for their basic livelihood in old age. The other concerns the nation’s security if, as news reports indicate, the Republicans decide that rather than raise taxes, the government will borrow the money to finance the shift to private accounts. The Congressional Budget Office already projects a federal deficit of $2.3 trillion over the next 10 years. Making the Bush tax cuts permanent, as the president urges, would add another $1.9 trillion. But the total of $4.2 trillion is a low estimate because it allows for no adjustment for population growth and inflation in discretionary programs, not to mention future costs in Iraq or other wars. Borrowing the funds for Social Security privatization would raise deficits by $2 trillion more. From whom will we borrow the money? These days about three-fifths of the federal deficit is being financed by foreign countries, much of it by their central banks. Currently, Japan is holding $720 billion in U.S. treasuries; China, $174 billion. If the Bush proposal were enacted without tax increases, the federal government would go deeper into debt to foreign countries to enable workers to speculate on the stock market. prospect.org [Seems to me that China reduced plenty of their holding?]

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