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Politics : Formerly About Advanced Micro Devices
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To: TimF who wrote (218164)2/8/2005 8:17:18 PM
From: Road Walker  Read Replies (1) of 1572160
 
re: The deficit does matter, so does other obligations for future spending. The deficit doesn't matter more than other obligations for future spending.

It sure does. Future spending is subject to many, many variables, current deficits are real, black and white.

re: Interest rates respond negatively to debt mostly for two reasons. 1 - Concern about the ability of government to pay back the debt or the inflation that the government might allow to pay it back in inflated dollars. 2 - "Crowding out", if the government borrows money, less money is available for the private sector to borrow.

That's three.

re: In the case of social security #1 applies with or without the private accounts.

Wrong. First you ignore interest. Second you assume everything else will go well. If the world economy, or the domestic economy were to break bad, the ability to pay back those debts would be greatly diminished. And the country is pushing against unknown deficits and current account deficits. The later may be even more critical.

re: The payouts to social security grow in a way that has a similar net effect to having interest costs on the money owed. If the future payouts where static then you would have a point but they are not static even when measured in inflation adjusted dollars.

So the payouts are going to be "interest rate adjusted". Come on man, you are making stuff up now. You own bonds, interest rates go up, your bonds are worth less.

Quit stretching to justify this huge expense, for some ideological or political prejudice. Be pragmatic. We can't do it, we can't afford it. Bush already spent the money we might have been able to use for a program like this.

John
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