"Ah, Mabel, this is Tim here, bring me a big eraser, will you please? I've noticed that we owe the Social Security Trust fund a tad over two trillion and that's more than were going to be able to pay. I'm just gonna erase a few lines here in this spread sheet and that ought to take care of this little problem." You, sir, are just a tiny bit nuts. (Breen, I mean, not Tim.)
Ummmm...it appears the gov't has ALREADY told the Social Security "fund" to piss up a rope... http://market-ticker.org/cgi-ticker/akcs-www?post=189249
Let me be a little clearer: I don't want or need to hear from you. What I need is a specific cite with a specific passage that clearly states that these securities aren't a legal obligation of the US Treasury. If you don't have that, do us all a favor and save the bandwidth. You're wasting everyone's time.
Trefoil & Piezoe, I told you guys the truth about SS Fund and what it is, what is in it and what it means. I did it with specific explanations. You both seem to refust to understand it, even to understand what a 'contract' is at law, and what 'contract' means in a legal security, a 'contract that can be traded.' I am not going to continue to repeat myself. You have not offered any serious discussion of the issue, just that you don't believe it, but then again you havn't demonstrated in your discussion that you actually know anything about this kind of law, so I am not going to waste my time with it. Gastropod undertands it and has posted links to show you that what I am explaining has actually happened and is happening now. It happened before when the Gov't shut down under Clinton/Gingrich. You can go ahead with your flat earth, unstudied, thoughts; I don't care. I tried to present the actual way it works in a non ideological way but apparently you don't like the facts or the implications. Good luck.
It could be high time... just remember to convert USD into some combination of EUR, JPY and physical gold with a little CHF and GBP on the side. When choosing a new home country for your funds consider taxes levied on foreigners who don't live or conduct business in the country and whether beneficial ownership of assets is covered by client-attorney priviledge.
Piezoe and Trefoil, your imagined law suit would be really interesting...nominally we would see Tim Gietner as Trustee of the SS 'Trust Fund', represented by Eric Holder, Attorney General of the United States, suing Tim Gietner, Treasury Secretary, Defended by Eric Holder, Attourney General of the United States...and you say I'm nuts? Here is another forum where the same issues are being discussed: "http://pajamasmedia.com/tatler/2011/07/15/personally-i-prefer-clarity-on-the-social-security-trust-fund/ ". The discussion is initiated by Micheal Rully, former North American CEO of CIBC/Oppenhiemer.
You do realize the USA is the consumer of last resort, and has nuclear weapons right? That's what gives us leverage at the negotiation table, and allows us to pro long record deficits. Which buys us time to eventually be at a budget surplus.
If you understand the difference between the 'Special Government Securities', which are simply IOU accounting entries showing the Treasury has promised to borrow money to pay SS obligations when SS begins to run a deficit, and real 'Treaury Securities', which are tradable legal contracts to pay third parties interest and principal for a loan over a fixed term; then you can see how the Treasury would have no problem paying SS benefits even if the debt ceiling was not increased. The reason for this is that for each new Treasury Security the Treasury sold to borrow money to fund SS benefits, the Treasury would write down the equal amount of 'Special Government Securities' notated in the account of the SS Trust Fund. Since the 'Special Government Securities' notated in the SS Trust Fund and the amount of real Treasury Securitities outstanding are both included in the Debt Ceiling....the creation of new Treasury Securities that extinguish an equal amount of 'Special Government Securities' would have no net change on the national debt...the change would only be creating real securities to retire IOU promises. The Debt Ceiling has no bearing on the Treasury's ability to do this...so, there is no reason that SS checks would not go out...unless of course someone just wants to scare you.