“Soft despotism is a term coined by Alexis de Tocqueville describing the state into which a country overrun by "a network of small complicated rules" might degrade. Soft despotism is different from despotism (also called 'hard despotism') in the sense that it is not obvious to the people."
Wednesday, March 17, 2010
By the Way, What Ever Happened to the Lock Box?
You know were really screwed when Dennis Kucinich is the voice of reason, and now he is the deciding factor on nationalizing health care.
Regardless, that is seriously off topic, which is mostly what this blog is about. I just wanted to be the first to go off topic, beat Doug, and you have to get up pretty early in the morning to beat him going off topic.
Just Kidding Doug!
But that said, how come we forgot to open the lock box? Where did we put that thing? There must be at least $58 bazillion in there, surely enough to refresh all our 401k's, payoff the deficits for 80 or ninety years, fund every idea that comes into Obama's head and still enjoy our retirement.
Since I have vowed to never retire, I'll just leave mine in the box and get back to work preparing to make a big pile to stick in my own box. Screw the Chinese on building their football stadium in San Jose. Maybe focus on building a private healthcare network in Costa Rica? Hmmmm.
Posted by Deuce ☂ at 3/17/2010 11:53:00 PM
Labels: Worst decade ever
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Well imagine that, I googled "Where is the lock box" and up pops this:ReplyDelete
Time to Pay the IOUs out of the ‘Lock Box’
All the lies about the Social Security “lock box” are now on full display. This is the year we will start paying out more from the SS program than we took in. We’ve gotten here even earlier than predicted. This wasn’t supposed to happen until 2017. Whoops…
Sounds like a good time to start tapping the nest egg. Too bad the federal government already spent that money over the years on other programs, preferring to borrow from Social Security rather than foreign creditors. In return, the Treasury Department issued a stack of IOUs — in the form of Treasury bonds— which are kept in a nondescript office building just down the street from Parkersburg’s municipal offices.
Now the government will have to borrow even more money, much of it abroad, to start paying back the IOUs, and the timing couldn’t be worse. The government is projected to post a record $1.5 trillion budget deficit this year, followed by trillion dollar deficits for years to come.
But, wait! We have $2.5 trillion in there and it’s earning interest. It’s real money. We’re fine, right? Right. Pull this leg and it plays “Jingle Bells.” This is the mess conservatives have warned about for so long. The lock box hoax is nothing but a promise from the government (us) to pay us. Yes, the bonds will be paid, but that shouldn’t ease your anxiety. The money has to come from somewhere. Government only has two choices to get it:
In theory, the federal government has $2.5 trillion stashed away in a nondescript office building in the sleepy little town of Parkersburg, West Virginia. That is where the Treasury Department keeps stacks of nonnegotiable Treasury bonds payable to the Social Security Administration. But as the Associated Press reported yesterday, for the first time since the 1980s, the federal government will not be adding to that stack. Thanks to an aging population and slow economy, Social Security will pay out $29 billion more this year than it takes in. And the Congressional Budget Office reports that after small surpluses in 2014 and 2015, the program is projected to be in the red from 2016 until forever.
But what about Al Gore’s Social Security “Lock Box?” Can’t we just spend that $2.5 trillion in the Social Security Trust Fund? As Heritage experts David John and Brian Reidl explain, since 1939 federal law has required Social Security to “invest” its extra money in Treasury bonds. Those bonds are really just IOUs from the government to the government. The feds already spent that $2.5 trillion long ago on programs such as education, foreign aid and defense. Add the $2.5 trillion Social Security obligation onto our other obligations and our current national debt stands at $12.5 trillion, or nearly $42,000 for every man, woman, and child in the country. And it will only get worse under President Barack Obama’s Budget. It would: 1) borrow 42 cents for each dollar spent in 2010; 2) leave permanent annual deficits that top $1 trillion as late as 2020; and 3) dump an additional $74,000 per household of debt into the laps of our children and grandchildren.
Responding to such unsustainable borrowing, Moody’s rating agency announced Monday that the United States needs to make deep spending cuts or risk losing its AAA credit rating. From the report: “growth alone will not resolve an increasingly complicated debt equation. Preserving debt affordability at levels consistent with AAA ratings will invariably require fiscal adjustments of a magnitude that, in some cases, will test social cohesion
Back when the market was really tanking, I made the humble suggestion on a post that it might have been a good idea for the Treasury to start purchasing some major blocks of blue chip stocks and stick them in the lock box.ReplyDelete
Oh well, who would have guessed the market would go back up.
I guess Obumble did. We're making a fortune off of our bank stocks. We're up $4.6 Billion on Citi, alone.ReplyDelete
Treasury Bonds are legal debts.ReplyDelete
Social Security is not a "Debt."
Social Security is some sort of "social contract." Except, it's not really a contract. More like a promise to "take care of you."
On the level of, "of course I'll still love you in the morning. You're my girl, ain'tcha?"