Worthless I.O.U's and "BOO!"

"There is no trust fund, just IOU's that I saw firsthand, that future generations will have to pay."

Translation: "BOO!!"

That's the latest mantra heard on the Administration's "Social Security Sideshow Road-Trip". On its face, the Administration is saying that the "full faith and credit" of the U.S. is no longer (perhaps never was) a standard and that the IOU's are worthless.

Curiously, there is no mention of the unprecedented raiding of the Social Security Trust Fund over the last 5 years to pay for, among other things, tax cuts for the wealthy (who don't depend on Social Security for things like food and/or medicine).

Perhaps the attack on the sanctity of the 'full faith and credit" standard is why the Social Security Administration, despite being used as a pawn in the Administration's game, felt the need to issue the following statement: "Far from being worthless IOU's, the investments held by the trust funds are backed by the full faith and credit of the U.S. govenment. The Government has always repaid Social Security, with interest." The agency went on to say, "The special-issue securities are, therefore, just as safe as U.S. Savings Bonds or other financial instruments of the federal government."

But that's a boring inter-family squabble.

The following would be exciting: If priority creditors (Americans) are holding "worthless IOU's", then what exactly are the creditors below holding?

A recent Treasury Department report shows that $1.96 trillion of the $4.43 trillion in U.S. debt was publicly traded. According to the Treasury Department, the countries with the largest holdings are:

Japan: $701.6 billion
China: $194.5 billion
U.K.: $163 billion
Caribbean banking centers including the Bahamas and Bermuda: $92.5 billion
South Korea: $$67.7 billion
OPEC: $64.7 billion
Taiwan: $59.2 billion
Germany: $57.1 billion
Hong Kong: $52.9 billion
Switzerland: $50 billion
Canada: $43.4 billion
Mexico: $41.1 billion
Luxembourg: $29.3 billion
Singapore: $27.6 Billion
Ireland: $21 billion

It makes one pause and wonder- when will the Administration sit down with the governments and business leaders listed above and tell them that they invested in "worthless IOU's". The smart money is on "never". That's because foreign creditors don't react well to scary "BOO" sounds emanating from the bushes.



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