Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Sharks in the Septic Tank -- Ignore unavailable to you. Want to Upgrade?

To: Win Smith who wrote (21235)	8/9/2001 5:59:48 PM
From: TimF	Read Replies (1) \| Respond to of 82486

Tim, let's try another line. The Fed holds a lot of treasury bonds. Do you think those bonds are as meaningless as the bonds in the SS trust fund alleged are? Greenspan would be interested to hear that, I imagine. They are meaningless in terms of the government actually gaining an asset. I don't think anyone even tries to claim that there is some massive "Fed trust fund" which could be spent, and which means we don't have to worry about government debt so much. They are potentially useful in terms of how the fed can use its holdings to manipulate the money supply. Whether or not the fed should be trying for anything other then monetary stability is an entirely separate topic. Tim

To: Win Smith who wrote (21235)	8/9/2001 6:14:44 PM
From: The Philosopher	Respond to of 82486

They are meaningful only to the extent that the American people are willing to pay the taxes to redeem them. If we held German bonds in the SS trust funds, the German people would have to pay the taxes to redeem the bonds so we could pay our SS pensioners. But we don't hold German bonds. We hold US bonds. Which OUR taxpayers have to pay the money to redeem. By holding US bonds in the SS trust fund, all that means is that taxpayers will have to pay taxes to redeem the bonds which could then be used to pay the SS pensioners. If the bonds were wiped out tomorrow, the taxpayers would have to pay exactly the same amount to support the SS pensioners. Whichever way you look at it, taxpayers will be funneling taxes through the government to the pensioners. Whether those dollars go through and additional accounting step called paying off a bond or not is irrelevant to the taxpayer. It's a simple formula. Taxpayers to government to SS recipients. Either way. Taxes are taxes. You can CALL the Income Taxes or SS taxes, but either way they are taxes. What we have done up to now is use all the Income Tax receipts to pay for defense, education, etc. Of the SS taxes, some have gone to SS recipients, and the rest has gone to defense, education, etc. At some point in the future, all the SS taxes will go to SS recipients, and of the Income Tax receipts some will go to defense, education, etc. and some will go to SS recipients. Money in from taxpayers, money out to defenses, education, SS recipients, etc . Calling some of it bond purchases or repayments doesn't change the ultimate equation one whit.