From: Mark D. Fulwiler (mfulwiler@earthlink.net)
Date: Sat Jan 23 1999 - 15:21:48 MST
Eliezer S. Yudkowsky <sentience@pobox.com> wrote:
> The "Social Security trust fund" is bullshit. The government is
> required by law to invest the money in Treasury bonds. In other words,
> the government loans Social Security income to itself and spends it.
> There ain't nothing in the trust fund but a little note reading "I.O.U.
> $30 trillion - the Feds".
>
Well, the trust fund is "bullshit" from a libertarian perspective
because the I.O.U.'s will eventually have to be paid off by taxation and
most people , according to the CATO Institute, will end up with a
negative net return from Social Security. Also, participation is
compulsory, as you know.
However, if you hold a government bond and try or cash it, I assure you
it will not be considered "bullshit" by a bank and is, as a practical
matter, as good as cash. The government's I.O.U.'s are backed by its
taxing power and vast assets.
Government bonds have the effect of shifting income from one group of
people (the taxpayers at large) to another group (the bondholders).
However, using your argument all bonds would be "bullshit" because the
company you loan the money to just spends the money and gives you an
I.O.U. And bank accounts are "bullshit" because there really is not
enough cash in the vault to cover all deposits.
Of course, unlike the government, private companies cannot loan money to
themselves and consider the loans assets. That's a neat little
accounting trick.
Mark
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