REFLECTIONS

Posted on July 3, 2011

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ON SOCIAL SECURITY; DEBT CEILING AND SPENDING CUTS SEPARATE ISSUES

If the social Security trust fund is in trouble, we’re all done for as a nation. And, some Congressmen are flirting with bringing down our bond rating by saying they will not raise the debt ceiling.

To fail to increase the debt ceiling will drop U.S. government bonds from AAA rating to a D rating. This means the interest rates will raise on our U.S. government bonds held by the Chinese and other nations. We will begin spending trillions more in interest money with the Chinese rather than keeping the money here at home.

How can some Congressmen say they will not raise the debt ceiling unless more spending cuts are made? The debt ceiling and reduction of the national debt are different issues. To increase the debt ceiling is the thing to do unless we want to default on U.S. government securities.

There is an appropriate form for discuss matching expenditures to revenues and reducing the national debt. This is the appropriations process.

Once Congress voted to continue funding stimulus spending and tax cuts on borrowed money, as it did last December, it has no choice but to support the budget it approved.

It is simple, reducing the national debt can and will come only from cutting spending, plugging tax loopholes, letting the Bush tax cuts expire and possible raising taxes.

It is a hoax to say the Social Security trust fund is in trouble because it is invested in AAA-rated government bonds.

But our Social Security won’t remain secure if some Congressmen keep playing chicken with the bond market which can result in a world wide depression. Time is running out to raise the debt ceiling.

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