The more high-sounding the legislation, the more destructive its consequences.
Case in point, HR 3293– the recently introduced Debt Limit Reform Act. Sounds great, right? After all, reforming the debt seems like a terrific idea.
Except that’s not what the bill really does. They’re not reforming anything. HR 3293′s real purpose is to authorize the government to simply stop counting a massive portion of the US national debt.
You see, one of the biggest chunks of the debt is money owed to ‘intragovernmental agencies’.
For example, Medicare and Social Security hold their massive trust funds in US Treasuries. This is the money that’s owed to retirees.
In fact, nearly $5 trillion of the $17 trillion debt (almost 30%) is owed to intragovernmental agencies like Social Security and Medicare.
So now they basically want to stop counting this debt. Poof. Overnight, they’ll make $5 trillion disappear from the debt.
On paper, this looks great. But in reality, they’re setting the stage to default on Social Security beneficiaries without causing a single ripple in the financial system.
Remember, when governments get this deep in debt, someone is going to get screwed .... http://www.sovereignman.com
