"They will kick the can. They will send a ceiling-raising bill to Obama, who will sign it."
July 9, 2011
By Gary North
A great default is behind us. The public is unaware of this. If you read this report, you will no longer be unaware of it.
The ease with which this default took place should serve as a warning: there will be additional, much larger defaults. Again, the public does not understand this. The main one will be Social Security. The program is now in the red: more money going out than comiomng in. But most people still cannot believe that the program really will go belly-up. That’s why I produced a video on this.
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