May 16, 2011

Heads Up, Federal Retirees, Obama and Geithner are Tapping Your Retirement Fund

Monique Chartier

Nothing to worry about, though, it's a loan and not a confiscation. You have no problem lending your retirement to someone who is over fourteen trillion dollars in debt, right ...?

The Obama administration will begin to tap federal retiree programs to help fund operations after the government loses its ability Monday to borrow more money from the public, adding urgency to efforts in Washington to fashion a compromise over the debt.

Treasury Secretary Timothy F. Geithner has warned for months that the government would soon hit the $14.3 trillion debt ceiling — a legal limit on how much it can borrow. With the government poised to reach that limit Monday, Geithner is undertaking special measures in an effort to postpone the day when he will no longer have enough funds to pay all of the government’s bills.

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Isn't this exactly why social security is underfunded and in trouble? Previous presidents raided it as their own savings account?

So yeah, it sounds like a fine idea.

Posted by: Patrick at May 16, 2011 12:20 PM

I read an article the other day that left me wondering. The thesis was that US money would never become valueless, there being enormous government assets which could be sold to satisfy debts.

Thinking abut that, it seems to me that at such a time our money would be worthless. So, who are we going to sell the Grand Canyon to? The money of super wealthy Americans would be worthless (although if it was accepted, and then destroyed, it might bring the money supply in line). That means we would be looking for foreigners with hard currency. Great, let's go visit the Chinese Grand Canyon.

Posted by: Warrigton Faust at May 16, 2011 1:01 PM

This is illegal. Borrowing via other means still raises the debt limit. This is no different than local governments taking money out of pension funds to put into the general fund. The debt continues to rise, the taxpayers are still on the hook.
In the private sector these bums go to jail. Why don't these crooks in government?
These are the same scumbags that want to blame Wall St. for every woe created by an out of control government, yet haven't sent one Wall St. crook to jail. It's one big drug induced fu@kfest. This will end badly.

Posted by: Mike Cappelli at May 16, 2011 3:02 PM

Default is the best answer but GOP doesn't have the balls. Once the Chinese, Japanese, Arabs, Europeans, etc. get burned they won't lend Cokehead Barry another dime and the house of cards collapses with a whimper.

Posted by: Tommy Cranston at May 16, 2011 3:29 PM

Posted by Mike Cappelli
"In the private sector these bums go to jail. Why don't these crooks in government?"

Well, you can take two views.

1. It is not our money any more, it is theirs.

2. It is our money, and they are "us". We elect them, so we implicitly approve their actions. Face it,they are spending the money on what the electorate "demands", or at least, accepts.

Posted by: Warrington Faust at May 16, 2011 4:56 PM

What could possibly go wrong?

I'm rolling over my 401K as these could be a target of an ever-avaricious government. Its a little alarming when the usually even-keeled econ-writer Meagan McArdle suggests converting excess money/bonds/stock to hard assets, even real estate, to reduce your profile.

Posted by: chuckR at May 16, 2011 4:58 PM

Monique -

... 1st step towards confiscating our 401K's ... legitimized by having tapped the Federal employees first ... demonic!

Posted by: Andrew SK at May 16, 2011 8:32 PM
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