It's been a while since I've been in a political argument with any substance, but a couple of unrelated things I've heard Tea Party people talk about over the last few weeks got me to thinking about some stuff, and I finally decided to do a little research and start a fight in the "Chip the Bartender" thread for old times' sake and in memory of CAVMAN.
One fact I heard that had a lot of my wing-nut buddies all het up was that a trillion-dollar stack of hundred-dollar bills would be 67,000-some miles high. Another thing I've been hearing, although it's not a fact as far as I know, is about the Social Security system being bankrupt. The two of them together bring up some interesting questions for pragmatists.
Conservative Chris Martenson's blog had a pretty typical treatment of the Social Security problem a couple years ago that had a photo of George W. Bush standing next to he Social Security trust fund. He (Chris) evidently doesn't want me to link directly to the photo but here is his article.
http://www.chrismartenson.com/blog/soci ... ears/15944And, from ssa.gov recently:
"The assets of the Old-Age, Survivors, and Disability Insurance Trust Funds represent the the accumulation over time of the difference between income and outgo. The growth of the assets from the end of December 1986 through the end of March 2010 is shown below by calendar quarter."
and
"Assets grew from about $47 billion at the end of December 1986 to about $2,539 billion ($2.5 trillion) by the end of March 2010."
The "bankruptcy" part comes in at the top right corner, I guess, where the "Income" line drops below the "Outgo" line for the first time.
The 2.5 terabucks in the Social Security trust fund is, of course, a liability for the Feds and an asset for citizens who receive or anticipate benefits, just as the paltry $800 billion dollars in U.S. Treasury securities held by our friends the Chinese Communists are an asset for them and a liability for the treasury and my bank account an asset for me and a liability for my bank, so I have no problem with calling the trust fund a bunch of IOUs. They have been racked up over the past 75 years to help pay for World War II, the interstate highway system, the Vietnam War, the space program, student loan programs, the Reagan arms buildup which brought down the Soviet Union, the Iraq and Afghan wars and a whole bunch of stuff that can be considered "investments" or "reckless spending" depending on ideology.
Anyway, my problem as a pragmatist is this:
What should the Feds have been doing with the trust fund for the last three quarters of a century? As my Tea Party friends point out, $2.5 trillion in a stack of hundred-dollar bills would reach about two-thirds of the way to the moon, depending on where you start stacking them, and it would be heavy enough that nobody could pull bills of the bottom, so I'm guessing someone would have to be posted up at the top of the stack to peel off bills to make Social Security payments.
A couple of my friends are Ron Paul "Gold Standard" fans who got me thinking about keeping the trust fund in gold. But from what I've been reading on the web there have only been about ten billion ounces of gold produced throughout human history and at current prices the trust fund would need about a quarter of that. Check my arithmetic but even if I'm off that doesn't seem very practical either.
Any suggestions?
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