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03/21/2005: "Bush’s Toilet Paper"

Bush was recently quoted as calling the government bonds in the Social Security Trust Fund “pieces of paper.” Statements like this baldly call into question the solidity of the global financial system for which government bonds are the foundation. He implies that Social Security recipients shouldn’t be secure in the redemption of these bonds, that these bonds could well be defaulted on. In fact, a US default would surely destroy the global financial system, as Bush and his cronies well know. It would be irresponsible enough if a random right wing blogger were dissing the likelihood of US government bonds being redeemed, but this is the President of the United States, for Christ’s sake! Social Security Trust Fund bonds are as much “pieces of paper” as are twenty dollar bills. Imagine that the government stopped recognizing US currency as legal tender. There could be only one result: society as we know it would collapse. The end result would be the same were the US to repudiate its debts by reneging on its bonds. All of this all points to a moral solution for the problems of upcoming generations in Social Security, the problems that Bush is lately so fond of citing. He need only change the law so that the payroll taxes going into the fund become real assets rather than payment for the current bills for right wing enthusiasms like war, subsidies, and martial toys. There would thus be no issue with upcoming generations having to use their tax dollars to redeem Social Security Trust Fund bonds, since Social Security’s tangible assets would in fact generate dollars. However, this would require that Bush give up a sweet deal: the current surplus in payments into the Social Security Trust Fund making his deficits look hundreds of billions smaller. Turning surpluses into tangible assets would thus make it impossible to meet his deficit reduction promises without increasing taxes (although the reality, as yet unrecognized by the GOP, is that we’re already there). What are the chances that Bush will finally admit to his moral obligations to the upcoming generation by killing his tax cuts and instituting needed increases? A snowball’s chance in a Midland summer! In any case, future generations might not be happy about redeeming Social Security Trust Fund bonds, but despite what Bush is irresponsibly saying, they’ll have absolutely no choice in the matter. A global financial meltdown will be as bad for them as it would be for us. On the positive side, they’ll probably have more anger with the separate set of bonds comprising the national debt. At least SS Trust Fund bonds were taken out to “help” them (although redeeming them takes exactly the same kind of tax dollar as any other kind of government bond). It’s the thought that counts!