From: "Steve Ewing" 

On Wed, 09 Feb 2005 21:21:07 -0500, Gary Wiltshire  wrote:

> On Wed, 9 Feb 2005 21:02:47 -0500, Geo  wrote:
>> No not really, the problem is the government has been raiding the fund
>> of all extra monies and using it like it was part of their budget.
>>
>> Geo.
>>
>
> No, that is not all.  The change from 16:1 to 2:1 ratio is factual, with
> or without borrowing from the account.

Geo.: The "fund" has not been stashed in a vault, no, it has been
used to buy Treasury bonds.  At some point the gov't is going to have to
repay them, with interest.  Therefore there is a looming problem with the
general fund (that will require tax increases to cover), but it is no
different than if the bonds had been sold to the Chinese.  Except that
there is some suspicion that Bush is setting us up to default on those
bonds, which would be Bad.

Gary: We seem to have handled the transition from 16:1 to 3:1 pretty
handily.  Why is 3:1 to 2:1 such a crisis?

--
Steve 
http://www.qmss.com/sewing

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