What funds money? It's already been spent. You're just collecting on IOUs.


Yep.

The IOUs happen to be Treasury bonds, the most secure investment in the
world; also the financial instrument that makes defeicit spending possible.


Dave wrote:
Not quite. He's collecting on the IOUs represented by the guvmint's promise
to pay SS benefits.

???

Since when is that an IOU? It seems pretty straightforward to me... Thom
is qualified for SS benefits, they give him the money. No IOUs involved,
unless you think President Bush is deliberately lying when he says he's
not going to cut current benefits due.



..... Since we're paying more in in SS taxes than the
amount going out, the guvmint is spending the rest of the money

Whoa right there. "The guv'mint" isn't "spending the money." It is
paying out SS benefits... which covers a lot more than just retirees,
BTW. While the SS excess has been used for decades to mask the true size
of the deficit, the gov'mint is NOT spending SS money on other things
and it never has.

... and giving
IOUs for it in the form of bonds.

Yep... as I said, Treasury bonds, the most secure investment available
*and* the means for Bush's deficit financing.

... Once the money being paid by us working
stiffs isn't enough to pay out the current benefits, the guvmint will (it is
hoped) start paying off the bond IOUs from some combination of income taxes
on working stiffs and the proceeds of issuing more bond IOUs, so it can use
that money to pay the SS IOUs.


What a tangled web you try to weave. Why are you worried about the U.S.
government defaulting on it's debt obligations? If that does happen 1-
it will largely be because of extremely irresponsible fiscal policy by
the Bush/Cheney crowd and 2- we'll all have much worse problems, as US
default is likely to bring on a world wide economic crisis.


It's a scheme worthy of Enron.


I thought you claimed Ken Lay wasn't guilty of anything?

DSK