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73 sats \ 89 replies \ @Cje95 7 May \ parent \ on: US Treasury issues 125 billion dollars worth of new bonds this week econ
There were talks about doing something called “baby bonds” where each child would get a bond from the government and then couldn’t touch it till they turned like 18 and I could see that being a “fantastic” way to offload them on the population… idea seemed to have died once the House flipped in 2022 but before it was talked about quite a bit on the hill
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The idea was based off of some other country I think in Europe. I will see if I can find who it was that was a huge proponent of it.
Ah found a link turns out it was reintroduced this Congress as well
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Here is the most recent version of the bill…. $1k at birth
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That's diabolical. I assumed they would put financial requirements on things like pension funds and university trusts that would require them to hold some proportion of US treasuries.
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To be honest I am not sure… I think they could be something that take care of the issue and they wouldn’t need to do that however I could see government pensions being another big off ramp for these bonds as well
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Could they do that?
Actually, arent they using social security to prop things up?
I think the government has borrowed from it time and time again.
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The social security trust was a fiction to begin with, but even so, it's been in the negative for several years now.
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Isnt it because they borrow from it though?
It should be highly positive with all the growth we have had in our economy in the past.
Just amazes me how mismanaged the money is.
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Not really, but sort of. There was some fake accounting that was called the social security trust fund, but it was never legally binding in any way and the program was never actually set up to be financially sustainable.
On occasion, politicians have publicly justified their reckless spending as borrowing from that fake trust fund, though.
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It was sustainable as long as the population kept increasing... ironically illegal immigration is really great at helping social security stay afloat since those individuals can never draw down from it
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Just like how pyramid schemes are sustainable.
What I mean is analogous to how defined contribution retirement plans are sustainable, but defined benefit plans are not. There was never a social security trust fund that mechanically contained all of the money or assets that would eventually get paid out. It was always organized like an unfunded liability, even if there was occasionally money somewhere that someone claimed was for social security payments.
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I would agree however one thing I have learned is that what makes the dollar worth anything is the US military. If you think the US military is going to collapse like Russia then you can think that the dollar is collapsing however given the sheer size and lethality of the military the dollar will remain stronger than most just due to the fact of in conflict you might hit the US once but the US will make you bleed for generations to come
If they got really desperate, they could do a bail-in for themselves and convert people's savings into treasuries.
The one certainty is that they will do something to prop up demand for US debt.
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Everything they do is cheating.
How would they even enact it?
Give each parent a debt of 1000$?
That would hurt a lot, considering how much a baby costs!
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There are lots of options, but one that comes to mind is that they could make it a refundable tax credit. That would basically let people buy bonds instead of paying taxes.
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