Three Ring Binder of Death

Three Ring Binder Of Death

by digby

For your entertainment, my latest wingnut email. This one is written by that noted actuarial genius and political hit man, Dr Jerome Corsi, last seen destroying John Kerry's reputation:

Think again if you believe Social Security will offer you a secure retirement.

Social Security may have irreversibly become a bankrupt Ponzi scheme. The
Associated Press disclosed the Social Security Administration has finally begun
trying to cash in the $2.5 trillion in IOUs the federal government has placed in
the Social Security "lock box."

What is clear now is that Social Security has become a Ponzi scheme in which the
payroll taxes of those currently working are applied immediately to pay the
retirement benefits of those already receiving Social Security...

For decades, Congress has routinely raided the Social Security Trust Fund,
taking the cash and leaving behind IOUs in the form of Treasury bonds.

The problem is that with a $1.5 trillion budget deficit already projected by the
Obama administration, the only way Congress has to cash in the $2.5 trillion in
federal IOUs owed the Social Security Administration is to borrow yet more

Curiously, the AP article pointed out the records of the Treasury debt in the
Social Security Trust Fund in a three-ring binder locked in the bottom drawer of
a white metal filing cabinet in the Parkersburg, W.Va., offices of the Bureau of
Public Debt, a division of the Treasury Department.

The AP reported the Treasury Department opened the Parkersburg office in the
1950s as part of a plan to locate government functions outside Washington, D.C.,
to protect the federal government in case of a Cold War nuclear attack...

Huh? Here's what the AP "reported" (in a nearly equally hysterical screed):

[T]o illustrate the government's commitment to repaying Social Security, the Treasury Department has been issuing special bonds that earn interest for the retirement program. The bonds are unique because they are actually printed on paper, while other government bonds exist only in electronic form.

They are stored in a three-ring binder, locked in the bottom drawer of a white metal filing cabinet in the Parkersburg offices of Bureau of Public Debt. The agency, which is part of the Treasury Department, opened offices in Parkersburg in the 1950s as part of a plan to locate important government functions away from Washington, D.C., in case of an attack during the Cold War.

One bond is worth a little more than $15.1 billion and another is valued at just under $10.7 billion. In all, the agency has about $2.5 trillion in bonds, all backed by the full faith and credit of the U.S. government. But don't bother trying to steal them; they're nonnegotiable, which means they are worthless on the open market.

That article is nearly as incomprehensible as the wingnut email, which goes on to say that we are all going to be left dying in a ditch unless the government ends social security. ( Which will end up leaving old people dying in a ditch, but perhaps the invisible hand will lift them bodily into heaven so we don't have to trip over them.) I won't bother reprinting the rest of it because it's like watching Glenn Beck and life is short.

But the scariest thing about it isn't the fact that it's wrong on nearly every detail. The scariest thing is that in terms of general narrative, it's not much different than the stale conventional wisdom coming out of the NY Times yesterday:

Next Big Issue? Social Security Pops Up Again

WASHINGTON — Now that landmark legislation overhauling the health insurance system is about to become law, addressing Social Security’s solvency could well become the next big thing for President Obama and Congressional Democrats.

Central to the health care changes are hundreds of billions of dollars in reductions in Medicare spending over time and expansions of Medicaid. As some administration officials acknowledge, that effectively takes those fast-growing entitlement programs off the table for deficit reduction just as Mr. Obama’s bipartisan commission to reduce the mounting national debt gets to work.

That leaves Social Security, the other big entitlement benefits program and one that Mr. Obama has suggested in the past that he is willing to tackle. While its looming problems are not of the scale of those afflicting Medicare, it now stands as the likeliest source of the sort of large savings needed to bring projected annual deficits to sustainable levels, many budget analysts agree.

And, they say, packaging future reductions in the retirement program that Democrats zealously defend with tax increases that Republicans typically oppose would have the makings of a grand compromise to shrink the debt.

Ah yes, the Grand Bargain ... now that's scary.

But keep in mind:

The national debt — the amount of money the government owes its creditors — is about $12.5 trillion, or nearly $42,000 for every man, woman and child in the country. About $8 trillion has been borrowed in public debt markets, much of it from foreign creditors. The rest came from various government trust funds, including retirement funds for civil servants and the military. About $2.5 trillion is owed to Social Security.

Good luck to the politician who reneges on that debt, said Barbara Kennelly, a former Democratic congresswoman from Connecticut who is now president of the National Committee to Preserve Social Security and Medicare.

"Those bonds are protected by the full faith and credit of the United States of America," Kennelly said. "They're as solid as what we owe China and Japan."