The best time to do something is during a crisis like the one we have now. It’s far more dangerous than 911 and Iraq rolled into one. I’m speaking of the financial crisis we’re currently facing.
This crisis is an opportunity to do something about the hundreds of billions of dollars in IOU’s that the government has issued representing the money that has been borrowed–and spent–from the Social Security Trust Fund.
Here’s what you do. FedEx the IOU’s over to the Federal Reserve and redeem them for money. IOU’s issued by the United States government must be worth at least as much as the toxic assets of the banks that are about to be purchased by us taxpayers. If not, then we are all up the creek.
The Fed holds the IOU’s providing the Treasury with lots of money to buy those toxic bank assets and to start buying up stocks in what is now a very depressed market. Henceforth, instead of IOU’s in a Trust Fund, there will be actual securities of DOW 30 or other companies truly representing value.
The IOU’s which would be held by the Fed will be worth just as much there as they are now wherever they are now.
Instead of the government spending the Social Security surplus each year, the surplus would be invested in the market. An individual’s pension would be guaranteed, as it is now if he/she qualifies. Over time, as the stock market appreciates, the government could buy back the IOU’s held by the Federal Reserve.
That’s it. More detail there than Geithner gave.
© 2009 Richard E Walrath
Richard E Walrath is a former budget analyst and currently resides in central Ohio with his family. He is also co-owner of the Articles and Answers News and Information site.