Better is subjective, if you spend a 1,000 dollars on a bond, you give your dollars and you get the bond. You have made the decision to defer your consumption, the seller of the bond has deemed it better to consume/invest today and to push up tomorrow's consumption tp today. Who made the better choice?My question is really quite simple (at least in my mind!), but I'll allow that I may be missing some fundamental factoid. But, here's how I see - put as simply as possible:
We citizens, taxpayers, or whatever...currently own both the debt AND the asset, in the form of the Social Security "surplus" which is "invested" in US Treasuries. You seem to be suggesting that we
should sell, transfer, or whatever...that debt to some entity other than we citizens. For the sake of THIS discussion, it's really not so important to know to whom we transfer that debt, except to know that it's someone other than "us".
All I want to know is what your thinking is on why that would be better than the current arrangement?
BECAUSE YOU GET THE CASH. You're choosing the cash today over the bond (cash in the future).C'mon...the bond - by definition - represents a "balance due". Please....take a shot at explaining how transferring that "balance due", from the citizen/taxpayer, to some entity OTHER than the citizen/taxpayer, is a positive?
I don't think you can do it. Nothing personal....but it's a pretty godamned obvious "math" thing. Have a go at - crunch your numbers - and be a man....come back and say that as hard as you
tried, you CAN'T make it pencil out.
They originally bought the bond with cash, by doing so, they deferred spending that money until some future date because they had a surplus, in theory they didn't need to run a surplus, they could've paid out more money or eventually decided to take less money in (they would need a law to do this). They didn't they took the cash and bought bonds. The cash for the bonds, the bonds for the cash, that's the tradeoff.Your response suggests that maybe....even as your horse may be lower than mine, you may not be up to this train. We'd best drop it and call you the wonderous winner!
Cash?...really...the best you can come up with is "cash"?
Well, right now for any given bond there's a market and you can look it up even. That number represents the aggregate actions of many, many market participants. You say that you should trade the debt for cash that is worth more than the debt. Fantastic, why would a buyer give you something that is worth more than what he's getting? That's not rational. As a market participant your actions will have that incremental marginal effect on the market. The buyer is willing to trade you a sum of cash for the bond. Is it worth it, or not, that's up to you. And if you say no, and of course you're only doing this indirectly, the market will trend ever so slightly higher as a result.Hillbillies sell their debt for whatever "cash in hand" is offered. Real money demands that the numbers be crunched and that the cash in hand exceeds the debt's value. You've made no effort whatsoever, to suggest how your theoretical "cash in hand" might be of greater value than the current deal.
Have a go at that one. And again, IF you understand the question and IF you have an answer to it, let's have it. I might challenge it, but at least there'd be something to challenge!