Wednesday, April 06, 2005

Back to Social Security!

Ah, I haven't made a post on Social Security in a while, but this tidbit was too good to pass up.

Evidently the President recently made a visit to Parkersburg, West Virginia. What's there, you ask? Well, I'll tell you. There's a filing cabinet filled with the Treasury bonds that back the Social Security Trust Fund. President Bush seized on this opportunity to say that the retirement security of Americans sits in this humble file cabinet filled with IOUs, and that we need to let people take control of their own money and have it in assets that they can touch.

Now I've said this before, and a lot of people have said it before, and a lot of people have said it again, and I will follow suit: Those Treasury bonds are considered the most secure investment in the world. To call them "simply IOUs" raises serious questions about the state of the massive $7.8 trillion federal debt, which is held in mostly these same Treasury bonds. If, as Bush seems to be implying, the government shouldn't have any obligation to pay back the bonds which back the Social Security Trust Fund, then what of the bonds that back China's investment in the United States' debt?

I'm no economist, and I've admitted such all over the place. But let's imagine that you decide to put your money into the bank. Imagine, then, that one day you're in there, putting in more money, and you see an old woman trying to withdraw her money. In response, the bank manager gets the CEO to fly down and tell the old lady that the bank's not going to make good on her investment.

It'd make you think twice about putting your money into that bank, wouldn't it?