Monday, May 02, 2005

On Treasury bonds, which are bad. Except when they're good.

Okay, so is stands to reason that President Bush should spend a lot of time contradicting himself these days, especially at press conferences. After months of proclaiming his mandate (and actually showing us a week ago, and yes, I had to go there), he's starting to look at the polls and realize that his approval rating is slipping and that even staunch Republicans are becoming reluctant to support his policies simply because they're his - basically, that the American people are realizing that our emperor is naked.

We also, if we're smart, realize that his Social Security plan suffers from a distinct lack of a plan. Bush is willing to take time out of is presidency to tour the country and pitch his plan to every American who's already agreed not to disagree with it, but the fact remains that, much like a toddler confronted with a lie, his story changes just a little bit every time he tells it.

"Did you eat the cookie?"
"No, no."
"You've got chocolate on your hands."
"Oh. Um... Well, yeah, I took the cookie, but I didn't eat it."
"Where's the cookie now?"
"Where is the cookie now?"
"Well, okay, I ate it, but I only ate half of it."

Except that little Georgie can't keep his story straight on the security of Treasury bonds.

"What about Treasury bonds to fund Social Security, George?"
"Well, they're inherently unsafe. They're just a bunch of IOUs from the government to itself, really not worth the paper they're printed on."
There is no "trust fund," just IOUs that I saw firsthand, that future generations will pay -- will pay for either in higher taxes, or reduced benefits, or cuts to other critical government programs.

The office here in Parkersburg stores those IOUs. They're stacked in a filing cabinet. Imagine -- the retirement security for future generations is sitting in a filing cabinet.

"But what about the people who would use them as an investment option under your plan for privatized Social Security?"
"Well, they're not actually so bad. As a matter of fact, they're good! Better than good! The US government stands behind them one hundred perecnt."
In a reformed Social Security system, voluntary personal retirement accounts would offer workers a number of investment options that are simple and easy to understand. I know some Americans have reservations about investing in the stock market, so I propose that one investment option consist entirely of Treasury bonds, which are backed by the full faith and credit of the United States government.

"Didja see that bug over there? That was a big one! It was as big as an airplane!"
Sigh. "George."
"Go to your room."

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