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Originally Posted by flstf
As I understand it, loaning money to yourself is like having no loan at all. It's like playing games on paper since the one giving the loan is the same as the one getting the loan. Maybe someday I'll pay my car money back by taking it out of the mortgage money, or something like that, but it all comes out of the same pot.
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In the mid 90's, the SSA became an independent agency. It possesses treasury
bills, just as the Japanese government (an estimated $700 billion worth) does.
These T-bills are negotiable instruments. What would preclude the directors of
SSA from selling or trading some of their T-bill portfolio to third parties, in
exchange for dollars, euros, or even gold?
If SSA is an independent agency, not unlike "government sponsered enterprises"
(GSE's) Fannie Mae and Freddie Mac, and it can muster effective PR to avoid
new legislation to restrict it's independence, and it actually has physical access to it's T-bill portfolio, then those T-bills potentially put the same
debt pressure on the US government as any other T-bills.
Bush wants to make his temporary tax cuts permanent. They were enacted
with a "sunset" provision. If no new legislation is enacted, they will expire and
tax rates and tax revenue will increase. Bush appears to want to remove the
argument that the tax cuts cannot be made permanent because we are
experiencing large federal deficits and there is no replacement for the plan
to use the budget surpluses envisioned back in 2000 and 2001 to "pay back"
the SSA trust fund. Bush sees a political necessity in designing a quiet default
of federal government SSA trust fund obligations. Added benefits are building
his "legacy", propping up already overvalued stocks, paying back political
supporters on Wall Street who anticipate "personal account" trading and
fund administration commissions.