"DSK" wrote in message
. ..
Jeff Rigby wrote:
Then he doesn't have to borrow the money and your statement was in
error?????

Of course not.

... If the money is there he doesn't to have to borrow it!

Uh huh. And since when did the Bush Administration propose a budget that
was anything close to balanced?

... You can't have it both ways.

I'm not the one trying to have it "both" ways. I am trying to familiarize
you (and a few others) with a few basic facts, & introduce some fairly
simple & straightforward logic.

You are insisting that
1- US treasury bonds are somehow "worthless" when the fact is that they
are the most secure investment available.
Not that they are worthless. Just if they are redeamed then the government
will have to pay them off by issuing other treasury notes because the
budget is not balanced. So the statement that Bush will have to borrow the
money is correct. The money is not there in the treasury!

2- If Bush can somehow make Social Security go bust all the sooner, that
the gov't will be forced to stop borrowing money.

That's a stupid statement. The Bush plan is to cushion the eventual
reorganization of SS by having a small portion that can earn more than the
treasury notes currently being issued. Besides the talking points currently
being considered (raising the SS age to 67, reducing COLA, eliminating many
of the dependant benefits) there are more draconian measures in the works
for those who are under 50.

The Draconian measures are because the money to pay SS to those under 50
will have to come out of the US treasury when the treasury notes have to be
redeamed. And the money is not there!

The SS fund has a surplus, more money coming in than is being spent on
SS.

Correct.

This money can't be used for the Bush SS plan because it's being spent to
finance other areas of the Federal government.

Wrong.

This is like saying that you own your neighbor's house, because the money
the bank loaned him on his mortgage came out of your checking account.

???

Beware the most vocal in criticizing Bush's plan for they have eyes on
the SS money and want to spend it on their pet projects.

Wrong. The most vocal critics of Bush's SS plan are the ones who don't
want Social Security to go bust all the sooner, and who have the fiscal
responsibility to not want to run up an even larger deficit to make up the
difference in SS income/payouts.

So would it be OK if the surplus was used to finance the private accounts?
The Governemnt would then only have to issue treasury notes to the private
sector rather than to it'self. That would cause inflation right, inflation
the cause of which couldn't be hidden from us.


The deficit spendinginflation/sliding scale income tax system that was
started in the 60's breaks down if congress reduces the tax rates or if
we don't have inflation above interest rates that are paid by treasury
notes.

???

That almost sounds like an intelligent statement. But I suspect it's
another one of those delusions which you can't let go of.

Please explain further. Also explain why we haven't had this "breakdown"
when we've actually had inflation rates below Treasury return rates many
times over the past 40 years, inlcuding for about the last 10 ~ 12.

DSK

The breakdown is a short term massive increase in the Federal Deficit.
Long term the "deficit spendinginflation/sliding scale income tax system"
pays off deficit spending by bumping everyone up the sliding scale income
tax rate chart. The more you make the more % of your income you pay in
taxes. IF there is no inflation for long periods then fewer people get
bumped up the tax scale. Or if Republicans move everyone back down the
income tax scale the same applies.

The deficit spending is not being paid back because the Government is not
getting an increase in revenue.

Also, if the Republicans think that they can get elected by agreeing with
you that you have less disposable income because taxes are too high and they
lower your taxes, they get elected. There are long term consequences to
short term efforts to get the money to deficit spend that give new meaning
to the term political payback.

The biggest problem with this system is there is no incentive to balance the
budget. It gets runaway and spends money that it shouldn't be able to spend
(SS).