Reply #56: Yeah, I've read all those, and the arguments are flawed.

[stopbush]

Simple point: they say SS has built up a $3-trillion trust fund. Well, not really. There's $2-trillion worth of IOUs sitting in the SSTF in the form of government securities. But there is NO CASH surplus in the SSTF.

The only way Wall Street can "get their hands" on that phantom $2-3 Trillion would be for that amount to be paid to them out of the General Fund. That money doesn't exist in the general fund either.

Ergo, the only way Wall Street can get their hands on SS is by buying that debt from the government in the form of bonds, the same way China buys Treasury bills today. What Wall Street would be left holding is an incredible amount of debt. That in and of itself doesn't mean that Wall Street would be running SS. They would simply own the debt.

What they could demand is that the US government raise taxes on everybody to, oh, say 90% to cover that debt. The threat - just like threats against currency - would be to sell that debt on the open market for pennies on the dollar. That would destroy the "full faith and credit" of the USA as both a lender and a debtor nation, turning us into the biggest third-world economy in history.

Why Wall Street would wish to do such a thing is beyond my comprehension. Maybe to have the leverage to acquire water and air rights. Who knows.