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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Road Walker who wrote (218212)	2/8/2005 9:20:22 PM
From: TimF	Read Replies (1) \| Respond to of 1572190

You need revenue (or stored wealth but that really isn't applicable in this situation) to pay for any spending. If I borrow $10k at 6% compounded annually and use the $10k to remove an obligation to pay $10,600 next year, my net position has not changed. If the credit bureaus knew about the obligation I had then my credit rating won't even change and if they did not know about the obligation than they were not accurately accessing the risks of lending to me. The big buyers of treasury bonds know about the governments obligation to pay for social security. And yes I know debt doesn't normally compound annually I used that just to make the calculation simple. But the same principle applies if it compounds monthly, weekly or daily, except you have to be able to remove a slightly larger future obligation to make the positions equivalent. The interest on trillions of dollars of borrowing is huge, as is the obligation eliminated. At the moment the need to sell extra bonds to the public is to replace bonds that would have been sold to the SSA. The cost to the general fund is pretty much the same. As far as the SS fund is concerned it has less assets (holds less bonds) but also has less liabilities (is not obligated to pay as much out in the future. In terms of the overall balance sheet you haven't made a major change in any direction. In terms of cash flow the negative cash flow from the interest is balanced out by the reduction in payments later. Tim