http://www.timberjay.com/current.php?article=1581
Bush theater growing absurd in Social Security debate
By Marshall Helmberger
President Bush’s campaign to partially privatize Social Security is
descending into absurd theater.
This week, the President showed up at the federal Bureau of Public
Debt, television cameras in tow, to make the rather bizarre argument
that the government he oversees can’t be trusted to make good on its
debts.
The president claimed during his visit to this virtually unknown
government office in West Virginia, and at a speech later on Tuesday,
that future retirees can’t count on the Social Security trust fund
because the fund consists solely of government bonds, rather than
mountains of horded cash.
With the help of a somewhat starstruck federal office clerk, Bush
"exposed" the shocking truth of the Social Security trust fund-- that
the $1.7 trillion in federally-issued bonds are kept in a file
cabinet.
"Imagine," uttered the supposedly-flabbergasted Bush, "the retirement
security for future generations is sitting in a file cabinet."
Exactly what the President’s point was isn’t entirely clear.
If he’s worried those paper records aren’t safe in that file cabinet,
he could certainly propose they be moved to Fort Knox and be kept
under armed guard.
But don’t look for Bush to suggest that, since he is undoubtedly aware
that the bonds in that file cabinet are simply paper copies, kept in
compliance with federal law.
As with virtually all bonds issued these days, publicly or privately,
the bonds that comprise the Social Security trust fund exist primarily
on computers--- the same computers that would supposedly keep track of
the hundreds of millions of private Social Security accounts the
President says he wants to establish.
The larger point Bush tried to make was that we shouldn’t trust the
trust fund, since it is composed solely of government obligations, not
actual currency.
It’s a remarkable argument for an American president to make.
For years, we’ve believed that federally-issued bonds were the safest
security money could buy.
That security has enabled the federal government to sell trillions of
dollars of its debt to investors, at very low interest rates.
Now, at a time when those investors are increasingly worried about the
falling dollar and the relative worth of U.S. treasuries, the
President is telling the public that government securities aren’t
worth the virtual paper they’re printed on.
That’s not just untrue— it’s reckless scaremongering.
President Bush knows full well that the bonds held by the Social
Security trust fund are as good as any other federally-issued
security, and that they can and will be redeemed in future decades to
cover any Social Security funding gap for at least the next 37 years--
and well beyond that date with minor adjustments in the system.
And those bonds are not just sitting there-- they are earning nearly
six percent interest a year.
If Social Security simply kept all that as cash, which apparently
would be preferable according to Bush, the trust fund would lose out
on tens of billions of dollars a year in accumulating interest.
Unless you believe in keeping your money in your mattress, Bush’s
arguments simply make no sense.
But then they didn’t have to.
Since Bush’s campaign for private accounts has been waged entirely in
front of friendly, pre-screened audiences, the cheers and applause are
guaranteed, no matter what kind of drivel Bush offers the assembled
crowd.
It’s all for sound bites and show--a president strutting on the stage,
in this case, signifying nothing.
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Ya need much more evidence that Georgie Bush is silly and dangerous
clown?
Harry
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