Social Insecurity
23 January 2005
Editor, The Washington Post
1150 15th St., NW
Washington, DC 20071
Dear Editor:
Mark Weisbrot and Dean Baker assert that the Social Security trust fund, because it holds Treasury bonds, contains genuine assets (“It Ain’t Broke, So No Need to Fix It,” Outlook, Jan. 23). Hogwash. Treasury bonds are an asset to me, to Warren Buffett, to the central bank of Ukraine, and to everyone else who holds these bonds EXCEPT Uncle Sam and any of his agencies. The reason is that when these bonds come due, the entity responsible finding the funds to redeem them is none other than Uncle Sam.
It's as if Jones earns $50,000 and spends it all, but writes an I.O.U. to himself promising to repay himself $50,000 plus interest. Is this piece of paper a real asset to Jones? Does Jones’s spotless credit record change your answer?
Sincerely,
Donald J. Boudreaux
Department of Economics
George Mason University
Editor, The Washington Post
1150 15th St., NW
Washington, DC 20071
Dear Editor:
Mark Weisbrot and Dean Baker assert that the Social Security trust fund, because it holds Treasury bonds, contains genuine assets (“It Ain’t Broke, So No Need to Fix It,” Outlook, Jan. 23). Hogwash. Treasury bonds are an asset to me, to Warren Buffett, to the central bank of Ukraine, and to everyone else who holds these bonds EXCEPT Uncle Sam and any of his agencies. The reason is that when these bonds come due, the entity responsible finding the funds to redeem them is none other than Uncle Sam.
It's as if Jones earns $50,000 and spends it all, but writes an I.O.U. to himself promising to repay himself $50,000 plus interest. Is this piece of paper a real asset to Jones? Does Jones’s spotless credit record change your answer?
Sincerely,
Donald J. Boudreaux
Department of Economics
George Mason University
Posted by Don Boudreaux on
Friday March 31, 2006 at 6:19am