Sunday, July 10, 2011
Retirement Armageddon
via Gary North
What? Would the government really break its retirement promises? Of course. It has already been done. Bear with me. You need to know how the game is played in Washington.
Legally, the Federal government is a month away from bankruptcy. The government, under the direction of Treasury Secretary Geithner, is borrowing money from Federal employees' pension funds to keep the doors open.
It's an accounting trick. First, the Federal government funds the pension funds with money. Second, the funds buy Treasury bonds. Third, the government immediately spends the money. It's like Social Security, whose Trust Fund is a pile of IOUs from the government. Read more: On the Road to Government Default
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