I understand and agree with all that -- I think that's the same thing I just said (including raising the cap), except for one thing:
"The SSTF can't, by law, resell the bonds it invests in."
Technically, you're correct, but I believe that technicality is equivalent to selling. If a bond matures, and the treasury issues a new bond to the public to get back the money to pay the mature bond, at the end of the process, we have less debt held by the SSTF and more debt held by the public, but the same gross debt modulo interest, which would have had to have been paid anyway, surplus or deficit. The only difference lies in maturity date and interest rate, and that isn't relevant for the discussion on hand. [There's a bit I deleted about the SSTF getting better interest rates than the public, but it's not relevant.]
Yes, I'm a physicist, and you caught me saying "Look at this spherical cow." Still, I think it's conceptually equivalent.
PS The arguments about the debt aren't about the solvency of the SSTF -- they're about the debt held by the public growing. They say that SS is taking in less money than it is spending, which causes debt held by the public to grow. This is all technically accurate.
"The SSTF can't, by law, resell the bonds it invests in."
Technically, you're correct, but I believe that technicality is equivalent to selling. If a bond matures, and the treasury issues a new bond to the public to get back the money to pay the mature bond, at the end of the process, we have less debt held by the SSTF and more debt held by the public, but the same gross debt modulo interest, which would have had to have been paid anyway, surplus or deficit. The only difference lies in maturity date and interest rate, and that isn't relevant for the discussion on hand. [There's a bit I deleted about the SSTF getting better interest rates than the public, but it's not relevant.]
Yes, I'm a physicist, and you caught me saying "Look at this spherical cow." Still, I think it's conceptually equivalent.
PS The arguments about the debt aren't about the solvency of the SSTF -- they're about the debt held by the public growing. They say that SS is taking in less money than it is spending, which causes debt held by the public to grow. This is all technically accurate.
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