From The American Street:

Next time you hear some trained Bush monkey echo Bush talking points and claim that the Social Security trustfund is stocked with nothing but a bunch of worthless “IOU’s,” pull out a $20 bill like this one:

A worthless IOU.

Explain to them that if the United States Bonds and Treasury Bills that make up the Social Security trust fund are “worthless IOU’s,” then so is this twenty dollar bill.

You see, Gvt. bonds, t-bills and this twenty are all inherently worthless pieces of paper with some printing on them. They have no real, intrinsic value.

Their only value comes from being backed by the “full faith and credit” of the United States.

So, in essence, what the Bush monkeys and Bush himself are saying is that you just can’t count on the “full faith and credit of the United States.”

A curious argument, and a dangerous one to make.

Dangerous because we are now running annual defecits in the neghborhood of $200 billion a year, based on Bush’s own questinable budget estimates. That means our Gvt does not have enough revenues from taxes, fees, etc to pay for all of its spending on an anual basis. We are $200 billion short…every year.

But, we still make our payments. We don’t print more money to do it. We BORROW that money. Yes, we borrow about $200 billion a year to pay for our Gvt spending habit.

But how, exactly do we borrow it? Do we go to a bank and say: “Hey bank, can you float the US Gvt a $200 billion loan this year?” And then repeat the process every single year for God know how long?

Of course not.

We borrow it by issuing Bonds and Treasury Bills that are bought by investors.

As it turns out, most of those who hold these “IOU’s,” happen to be foreign banks, and investors. Japan, China, Europe, Saudi Arabia…all invest in US Gvt Securities.

And we rely on their confidence in the “full faith and credit” of the United States to mainatin their habit of propping up our Goevrnment’s annual spending.

But what do you think these investors will do if Bush and his trained monkey minions keep saying that US Gvt. Securities are nothing but a bunch of worthless IOUs?

Yes. They will be much LESS likely to buy them because Bush is implying that we will default on them at some point. Thus, they will become more risky! So, in order to attrract buyers for these securities, we will have to RAISE THE RATE OF RETURN on them to make them more attractive. This will kill our economy because this will also raise longterm interest rates.

Or, we will have to massivley increase taxes by at least $200 billion to pay for our spending.

Or, we will have to cut our annual spending by at least $200 billion a year.

That means massive cuts in Medicare, Medicaid, defense and a whole host of other vital programs.

In other words, Bush and the GOP are willing to destroy the product of all the blood, moral authority, and hard work previous generations of Americans put into building up the “full faith and credit” of the United States in order to achieve a short-term short-sighted, cheap-ass propaganda victory on Social Security.

Who needs Al Qaeda when you have the Republican party?

UPDATE: It’s even worse than I thought!