Ignorance or Malice? (Or Both?)
George W. Bush, trying to sell his floundering Social Security privatization scheme, recently pulled a PR stunt with a filing cabinet where he declared "There is no trust fund -- just IOUs that I saw firsthand. Imagine, the retirement security for future generations is sitting in a filing cabinet"
The thing is, those "IOUs" are T-Bills, AKA US Treasury Bonds, backed by "the full faith and credit of the federal government." In trying to scare Americans about the supposed insolvency of Social Security and convince them to let him privatize it, he has just asserted that US Treasury Bonds are a riskier investment than the stock, bond and money markets, where the money would go if Social Security were privatized.
This is an incredibly foolish thing to say, as our entire government is financed with T-Bills. Imagine if every citizen and foreign government that held T-Bills decided these are too risky and moved to cash out.
I do not believe the President when he says that T-Bills are riskier than the stock, bond and money markets, but to whatever extent T-Bills are riskier today than they have been in the past, that is entirely his own fault.
Remember that "lockbox" that Gore droned on and on about? What he meant was that he would keep the government from borrowing its money from the Social Security Trust Fund; that the Trust Fund would be kept separate from the government's operating budget. But Bush treats that money as all part of the same budget. That's what Republicans mean when they say "there is no trust fund." They spend any excess Social Security revenues the moment they come in the door.
Bush has spent that money on tax cuts for his friends. And yes, we all got tax cuts, but while you and I were cashing our $350 or $700 checks, Ken Lay and Paris Hilton will cash in with tens or hundreds of thousands or even millions of dollars between upper-bracket, Capital Gains and Estate Tax cuts; much of it coming out of the trust fund. Your check and mine were nothing more than an illusionist's sleight of hand to keep you from looking where the real action was.
So to sum up, Bush attempts to scare us about the solvency of our safest investment, thereby risking the solvency of the federal government, in order to get us to divert money to Wall Street. Ironically, to whatever extent his dire claims might be true, it's his own fault.
Lovely.
7:36:12 AM 
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