Treasury dips into pension funds to avoid debt

Reuters ^ | January 17, 2012 | Reuters

[John W]

The Treasury on Tuesday started dipping into federal pension funds in order to give the Obama administration more credit to pay government bills.

"I will be unable to invest fully" the federal employees retirement system fund beginning Tuesday, Treasury Secretary Timothy Geithner said in a letter to Democratic and Republican leaders in Congress.

The House of Representatives is expected to vote on Wednesday on the Obama administration's request to raise the country's legal debt limit to $16.394 trillion.

[scbison]

No, congressman pension plans are same as federal employees.

[businessprofessor]

” the Treasury robbed from several pension plans and furloughed many workers.”

Stop spreading misinformation. The Treasury did not rob the pension plans because the bank was empty. There were no assets to steal. The Treasury simply made book keeping entries that permitted the government to keep operating. For the furloughs, I understand that every government employee was given backpay so government employees simply received extra vacation time.

A day of reckoning is coming over unsustainable government spending. The day of reckoning will involve real economic events, not fraudulent government accounting.

[Graewoulf]

Thanks for this thread.

[stylin19a]

at the end of the article, with no explanation of what fund being talked about....

The Treasury Department has already tapped another seldom-used fund in order to allow the government to continue borrowing without running afoul of the country's laws.

[usconservative]

The Treasury on Tuesday started dipping into federal pension funds in order to give the Obama administration more credit to pay government bills.

Same thing the State of Illinois did. Raided the state pension funds, left a bunch of IOU's in them, and left the Illinois Taxpayers on the hook to make up 80,000,000,000 in shortfall.

Obama certainly learned that lesson well while a state Senator.

[businessprofessor]

“Probably no more or less fraudulent than any other treasury bond or dollar bill for that matter.”

The Treasury sells marketable TBills. These TBills are not marketable so they just represent additional government borrowing or money supply creation (more likely money supply creation since there is a limit on the amount of TBills that can be sold). If marketable TBills are not honored, the US government has defaulted. The dollar will plunge at that point. However, I doubt that point will ever occur because the US Treasury can just create dollars. However, external parties will stop buying US debt and devalue the dollar.

[P8riot]

Mind if I use that?

[lonestar]

how do they plan to pay it back and make the pension fund whole??

Ground Air Force 1 and Michelle.

[BIGLOOK]

Dip, dip...dipping.

This should get more than a few agencies, bureaucrats and fed retirees' attention.

BWTH, it's Disney World and fund raiser on this weeks agenda. Surprised this news was released so early in the week....not the news itself.

[dagogo redux]

“Does anyone think they will attempt to seize private bank accounts?”
___________________________________________________________________

Ultimately, they will attempt to seize everything, and they WILL seize anything they can get away with.

The ensuing push back - from those who try not to let them get away with it - will give them a reason to declare martial law.

[Irish Eyes]

Perfect......That is the ONLY way that most people will understand what we are facing.

Let’s now remove 8 zeros and pretend it’s a household budget:

• Annual family income: $21,700

• Money the family spent: $38,200

• New debt on the credit card: $16,500

• Outstanding balance on the credit card: $142,710

• Total budget cuts: $385

[Jim Robinson]

Impeach the corrupt bastards!!

[RedMDer]

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[Tench_Coxe]

"The ensuing push back - from those who try not to let them get away with it - will give them a reason to declare martial law."

They can't stay in D.C. forever....

[dragnet2]

I understand after the debate, Paul left to go back to D.C. taking a day off from the campaign trail in South Carolina, to vote against this.

[PMAS]

Nicely done

[JohnBovenmyer]

That fraudulent government accounting would be considered theft if done by a private person or firm. And if it were done with government funds appropriated for other purposes I'm confident the feds would drop the hammer on them. And those poor government employees on 'extra' vacation days. Did they have to expend any of their earned vacation days first? Were their expensive health care and other benefits continued during their unearned, unbudgeted vacation days?

Functionally the government shutdown was much like a strike for higher wages. With management supporting the strikers in defiance of the stockholders. At least in a real world strike those striking pay a financial price for their efforts. Here their alleged costs were a sham. They didn't dare have a real strike. Reagan was still alive and his example too fresh. But the result for the stockholders was the same. A similar group is currently using somewhat different tactics for the same cause with the Wisconsin recall elections. In spite of claiming great damages from Gov. Walker they seem to have loads of spare money to throw around. But this time management, or at least most of it, is standing with the stockholders.

[CitizenM]

Bump

[Terry Mross]

The republicans got beat up over the “raising the debt” issue. Now here it is again.

[Cheerio]

Does anyone think they will attempt to seize private bank accounts?

The RATS have been eying 401Ks for sometime now. Trillions there - ripe for the plucking. I heard the Feds want to have it thrown into the bankrupt Socialism Security "trust fund" - that way there will be no passing it on to your children.