Bush theater growing absurd in Social Security debate

By Marshall Helmberger

<snip> Exactly what the President’s point was isn’t entirely clear. If he’s worried those paper records aren’t safe in that file cabinet, he could certainly propose they be moved to Fort Knox and be kept under armed guard.

But don’t look for Bush to suggest that, since he is undoubtedly aware that the bonds in that file cabinet are simply paper copies, kept in compliance with federal law. As with virtually all bonds issued these days, publicly or privately, the bonds that comprise the Social Security trust fund exist primarily on computers— the same computers that would supposedly keep track of the hundreds of millions of private Social Security accounts the President says he wants to establish.

The larger point Bush tried to make was that we shouldn’t trust the trust fund, since it is composed solely of government obligations, not actual currency. It’s a remarkable argument for an American president to make.

For years, we’ve believed that federally-issued bonds were the safest security money could buy. That security has enabled the federal government to sell trillions of dollars of its debt to investors, at very low interest rates. <snip>

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