800 Billion In Treasury Securities Earmarked For Social Security May Be Used To Bailout Wall Street

[Better Believe It]

September 22, 2008
Will the Cure be Worse Than the Crisis?
The Paulson-Bernanke Bank Bailout Plan
By MICHAEL HUDSON

Michael Hudson is a former Wall Street economist specializing in the balance of payments and real estate at the Chase Manhattan Bank (now JPMorgan Chase & Co.), Arthur Anderson, and later at the Hudson Institute (no relation). In 1990 he helped established the world’s first sovereign debt fund for Scudder Stevens & Clark. Dr. Hudson was Dennis Kucinich’s Chief Economic Advisor in the recent Democratic primary presidential campaign, and has advised the U.S., Canadian, Mexican and Latvian governments, as well as the United Nations Institute for Training and Research (UNITAR)


My Kucinich-campaign colleague David Kelley and I agree on how Wall Street’s action plan ideally would work. The Republicans will take the $800 billion of U.S. Treasury securities presently earmarked for the Social Security Administration accounts, and achieve the privatization that Pres. Bush and his backers have been pressing for so hard for the past eight years. Under emergency conditions – today’s 9/21 as the modern analogue to 9/11 just seven years ago (the well-known natural lifespan of locusts) – will swap these Treasury bonds for junk mortgages, at face value of course. Then, a few months from now (after the new president takes office in February, or perhaps a few days before to achieve the usual political clean slate) the government will tell prospective retirees and workers who have been suffering FICA withholding all these years, “Oops, the government has just lost all your money. Well, that just shows how government planning is the road to serfdom. Next time save yourself by handling your own accounts – or at least choosing whether to consign your forced retirement savings to Lehman Brothers, Bear Stearns or kindred predatory money managers. If only we could have done this a few months ago, there would have been no meltdown and Wall Street would have been doing just fine.”

If you are going to take such a step, you of course say you are doing it to “save” the economy. You even proclaim yourself to be a hero. This is how the nation’s newspaper and TV media responded after news of the bailout of AIG and, more to the point, the Wall Street gamblers and derivatives traders whose gains and losses – that is, the ability of trillions of dollars worth of computer-driven trading gambles – to collect their winnings and avoid losses.

Please read the entire article at:

http://www.counterpunch.org/hudson09222008.html

[JaneQPublic]

1. A Republican Dream Come True.

With that, along with $5/gal gasoline and oil company's record profits, they must think they've died and gone to heaven.

[SmokingJacket]

2. It all makes so much sense.

I could throw up.

[lonestarnot]

3. No doubt they will make the grab from the most vulnerable.

[progressoid]

4. Fuck. I'm going to have to log off.

Sometimes reading stuff here is too hard on my blood pressure.

[yurbud]

5. k & r

[meowomon]

6. Oh hell no!

[leftofthedial]

7. can't "privatize" it?

just fucking steal it and give it to your friends.

[glitch]

8. I believe that is their point, as they have stated many, many times.

At what point do we start taking them at their word?

[Blue_In_AK]

9. I'm turning 62 next week.

I'm taking early social security. Maybe I can get a little bit out of it before it all goes under. This really sucks after paying in for 45 years.

[apnu]

10. At least you'll get something.

I'm 35, been paying into it since I was 16. When I'm 62, I bet the program won't even exist.

[Blue_In_AK]

12. Sadly, you may be correct.

It really just sickens me. I had been somewhat considering waiting until 67, but I don't want to take any chances now.

[nichomachus]

13. This is why we need to shut this down

[KayLaw]

15. I'm 54.

I've been paying since 1971 and have my doubts.

[nichomachus]

11. That's what I did

Started a year ago. Figured I might as well grab a few buck before they start stealing it all.

[SammyWinstonJack]

16. What really sucks is paying into it for 40 yrs with 5 left to go before early ss and knowing it

probably won't be there because RICH GREEDY ASSHOLES STOLE IT ALL! !! And what sucks even more is, some people only have ss for their retirement! Now they will get nothing and LIKE IT! :grr:

[avaistheone1]

33. No only did you fund over 70% of your own retirement, you also funded most of your parents

retirement. The boomer generation is the only generation to have funded themselves plus the generation before them. And we might not get much of anything at all.

Just say No! to this deal.

[bdamomma]

14. oh crap, wasn't this part of their plan

all along.

PITCHFORKS AND TORCHES TIME.

[foxfeet]

20. Is the guillotine ready yet? n/t

[kaygore]

17. So they got what they wanted: Privatized Social Security

My SS is now invested in the stock market!!!???? Oh, goody!

[Naturyl]

18. This had BETTER not be true. (n/t)

[mike_c]

19. this is the end game....

This is the pot of gold they've been after for a long time. The big wet dream.

[clear eye]

21. Aackk! n/t

[suston96]

22. Social Security Trust Securities......

First of all please Google "Chrysler bailout" and see what happened in 1980 when Pres. Jimmy Carter signed off on the 1.5 billion dollar loan to Chrysler.

You will find that Chrysler paid the loan back in 1983 - ahead of time - and added 350 million in interest charges - payable to the US Government.

http://uspolitics.about.com/od/economy/a/chryslerBailout.htm

But see this below. Investing SS Securities is not a new idea.

http://www.socsec.org/publications.asp?pubid=336

I doubt that any Congress or any agency responsible for those SS Trust Fund Securities will allow them to be used for a bailout of such unregulated delinquent and failing financial entities.

A loan something like the Chrysler bailout under similar constrictions and yielding a similar interest result would go far in financing universal health care, for example.

[druidity33]

24. Bullshit!

Without Regulation, everything will crash again anyway!

It IS A GIFT



Get a clue.


:eyes:

[suston96]

27. Without regulation? Did you even read the link to the Chrysler bailout......?

Did you see the extremes Congress put Chrysler through before that bailout was approved?

Did you even read my post?

I said: "I doubt that any Congress or any agency responsible for those SS Trust Fund Securities will allow them to be used for a bailout of such unregulated, delinquent and failing financial entities."

[Rosa Luxemburg]

23. The GOP had no clue how to govern

[Greyhound]

25. We've been telling you for years. K & R in the hope that we're wrong. n/t

:kick: & R

[voteearlyvoteoften]

26. Call your senator Call your congressman

We better flood their offices with our opinions. No blank check!! Cash for trash..are you kidding me. No accountability...wtf?
Social security is in danger because they will devalue the dollar and then fix the books so your COLA raise will not reflect reality.
Shell game afoot. Remember Harriet Miers? They threw out an obvious no go so they could get what they really wanted and get out of giving the SUpremem court appointment to a woman. The no lawsuit clause is the red herring that is an obvious no go so they can get what they really want snuck in while we congratulate ourselves on removing the obvious no go. Look out for the revision it will have the real bomb tucked in somewhere.

[BraneMatter]

28. There IS a difference...

between "government planning" and theft.

Let me rephrase that: there SHOULD be a difference.

The problem is that the government is in bed with the capitalists, so the "planning" is all for the benefit of the wealthy class.

"Government IS the problem," -- that's Reagan and conservative BS! That is just justification for deregulation and letting the capitalists run wild, which is what got us in this mess.

Government is NOT the problem. Corrupt government is the problem. Capitalism is the root problem, corrupting all government for its own benefit. Greed is part of its DNA, so exploitation and robbery follow as sure as the sun rises.

[halobeam]

29. k and r

[eleny]

30. kick

[aint_no_life_nowhere]

31. In the proposed bail-out bill, is there any provision on the source of the $700 billion?

I don't recall seeing anything addressing this. It may leave Bush carte-blanche to take that money from any source he sees fit: borrowing it, printing new money, or taking it from existing funds like social security. The bail-out bill as I recall it, seems to give the Bush Administration unlimited powers on where to get the money and who to give it to (i.e. any actions taken pursuant to the bill not reviewable by ANY court).

[dkofos]

32. Just part of their GRAND PLAN.

Wall street will get their grubby little hands on SS any way they can.