The Myth-ing Logic of Phony IOUs in the Soc Sec Trust Funds

Credit Default Swaps PIIGS vs CINN Group (California, Illinois, New York, New Jersey) – In response to European Sovereign Debt Crisis in Pictures; PIIGS Spreads to Germany at or Near Record Levels I received this chart from Chris Puplava at Financial Sense. click on chart for sharper image
 Chris writes "In addition to foreign credit risk (Greece, PIIGS), I’m seeing my CINN STATE (CA, IL, NY, NJ) Credit Default Swap (CDS) composite moving higher again."

Will Warren or a DINO Head the FCPB? –

The Wall Street Journal is reporting that Elizabeth Warren is quietly searching [Murdoch delinked] for a permanent head for the Consumer Financial Protection Bureau. The hunt suggests that Ms. Warren, a lightning rod for some bankers, might not be selected to lead the bureau, a centerpiece of the Dodd-Frank financial overhaul bill that passed this summer. Still, many liberal groups will push to get her in the post. President Barack Obama’s choice could signal how he intends to deal with resurgent Republicans in Congress. The feelers to business groups serve as a reminder that any nominee would likely need support from at least seven Republicans in the Senate to win confirmation. Among the names being discussed are Iowa’s attorney general, Tom Miller; New York state bank regulator Richard Neiman; and former Office of Thrift Supervision director Ellen Seidman….

Congratulations to Estonia – or Maybe Condolences? – If I’ve got this right, Estonia will join the euro in about 40 minutes. It is an impressive achievement, a symbol of the country’s transformation from Soviet province to good European citizen.But the cost of the adventure so far has included a Depression-level slump: GDP is growing again, but only after falling 18 percent. The IMF projections only go out to 2015 — and even then, the Fund expects GDP still to be below its 2007 level. Unemployment, having risen to almost 18 percent, is expected to remain above 10 percent into 2014. So, congratulations to Estonia — but condolences too. This wasn’t the glittering euro entrance you were promised.
The Myth-ing Logic of Phony IOUs in the Soc Sec Trust Funds – There has been a recent mini-surge of op-eds claiming that the ‘assets’ of the Trust Funds, all $2.6 trillion, are simply mythical. The most recent Scrooge to argue this line may have been Thomas McClanahan of the KC Star in this piece from Christmas: More mythbusting on Social Security ‘money’" in which he informs us how mistaken we are:  Many people believe the trust fund contains securities that have real economic value. To turn trust fund bonds into real money, the government must do what it would have to do if the trust fund did not exist: borrow, cut spending somewhere else, or raise taxes. The trust fund bonds may be assets from the point of view of Social Security, but they’re a liability for the government as a whole, and for us as taxpayers. Well the argument is at base nonsense on historical, political, legal and economic grounds, but it also suffers a logical hole big enough to run a Prison Bus through. Because if it is true in 2010 it was equally true in 1993 when the Trust Funds first got back to actuarial balance (per McClanahan another myth presumedly) and more to the point in 1983 when Reagan agreed to the tax increase via the Greenspan Commission. Which would logically make Dutch and the Maestro Greenspan pre-meditated thieves and liars.

Career Shift Often Means Drop in Living Standards – A new study of American workers displaced by the recession sheds light on the sacrifices a large number have made to find work. Many, it turns out, had to switch careers and significantly reduce their living standards.  “In many cases, these people are not very happy,” “They’re the winners who got new jobs, but they’re not really what they want, and not where they want to be.”  .  As of November 2010, only about one-third had found replacement jobs, either as full-time workers (26 percent) or as part-time workers not wanting a full-time job (8 percent).  And of those who successfully found work, 41 percent had switched into a new career or field.  Some of these may have been workers who retrained for new fields they wished to enter, but many seem to have taken their new jobs out of desperation. Only a minority of those displaced workers changing careers — 22 percent — said they had taken a class or a training course before finding their new job.

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