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Friday, 22 February 2013


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Much rubbish is talked about the Social Security Trust Fund. Americans don't seem to grasp a truth enunciated more than sixty years ago by Aneurin Bevan about our own equivalent "The truth about the National Insurance Fund is that there ain't no fund".

The American "fund" contains only funny money - promises by one part of the federal government to pay another. There's a problem all right, but it's the general problem of politicians promising jam tomorrow - and then tomorrow arriving. You can call this "the entitlements problem" if you like: Medicare, Medicaid, federal pensions, ... On and on it goes. Still, sovereign governments don't go bankrupt - they just renege on their debts and promises: FDR did, so why wouldn't some of his successors?

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