RE: Fictional Government Accounting-Answer to James(2)

[Andre Dermant <adseale@aol.com>]

The key difference between the Social Security Trust Fund owning special obligations redeemable only by the US Treasury and General Motor pension fund owning Government Bonds is not who owes the money but the kind of bonds and WHO OWNS THE BONDS. In the first case, the Trust Fund must sell the obligations to the Treasury which must find the money somewhere; in the second case, General Motor can sell the Bonds on the open market to anyone. The Government must find the money to pay for these bonds only when they mature.  
Of course all these bonds are paper assets; but I was only trying to clarify the discussion by showing that the "assets"  of the Trust Fund are backed only by your and my taxes.