US Treasury dips into pension funds to avoid debt

Black_Sun · Jan 19, 2012

http://news.yahoo.com/treasury-dips-pension-funds-avoid-debt-limit-202850021.html

WASHINGTON (Reuters) - 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.

However, unless the lower chamber and the Senate are able to shore up enough votes to block the White House request, the debt limit will be increased by $1.2 trillion next Friday and a repeat of last year's debt ceiling debacle will be averted.

Geithner said Treasury started suspending reinvestments in a federal pension fund known as the G-Fund -- a tool Treasury has had to employ six times over the past 20 years in order to keep the country below the statutory debt limit.

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.

(Reporting By Rachelle Younglai; Editing by Chizu Nomiyama and James Dalgleish)

Guest · Jan 19, 2012

This is very bad news for the US citizens. Many are forced to contribute and will likely not see their pension returned when they retire. It reeks as an act of desparation on behalf of the US Government...

hiho · Jan 19, 2012

according to foxnews this is common state practice :lol: but they will pay it back so its ok :/

Shaddam IV · Jan 19, 2012

Both the Australian government and opposition leaders have in the last year hinted that allowing the banks access to the nation's super pool would be on the cards. They don't frame it obviously, the couch it in soothing terms.

thatguy · Jan 19, 2012

Jonesy said:

Both the Australian government and opposition leaders have in the last year hinted that allowing the banks access to the nation's super pool would be on the cards.
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Not mine

JulieW · Jan 19, 2012

www.sovereignman.com brilliant as always

As you're probably aware, yesterday was the much ballyhooed blackout of several popular web sites in protest of new legislation that threatens the Internet as we know it.

The United States Congress has teed up two separate bills which give government agencies sweeping new powers to punish millions of innocent users, criminalize harmless activities, and effectively make entire web sites disappear at their sole discretion without any judicial oversight.

In a nutshell, these bills would create the online equivalent of Nazi Germany.
But what can we really expect from these people? It's not the first time that Congress has gone out of its way to destroy freedom and prosperity, and it certainly won't be the last. Just look at the last decade for a plethora of examples:

USA PATRIOT Act, 2001. The US Constitution officially became toilet paper when this bill of over 60,000 words just happened to be introduced only a few weeks after 9/11. Roving wiretaps, suspension of due process, and a complete loss of privacy became the norm.

Sarbanes-Oxley Act, 2002. In the wake of the Enron scandal, Congress did the only thing it knows how to do-- pass stupid laws with no thought of long-term consequences. SOX, as it became known, was one of the most burdensome pieces of legislation to American business in history.

The disclosure requirements alone added millions of dollars of unnecessary expenses to US businesses and sent foreign companies who were thinking about listing on the formerly prestigious NYSE running for the hills. Places like Hong Kong and Singapore benefitted from such short-sighted regulation, and the US became less competitive. Again.

Hiring Incentives to Restore Employment Act, 2010. The inappropriately named HIRE Act essentially puts a gun to foreign banks' heads and forces them to make a decision: any bank with US clients must either enter into a costly information sharing agreement with the IRS, or be subject to a 30% withholding tax on US-sourced capital flows.

Consequently, a number of foreign banks have begun dropping their US clients. Taken in conjunction with various US Securities rules, many foreign businesses have also begun dropping US citizens as partners, shareholders, and directors. It's simply too onerous to have to deal with all the disclosure filings and risk action by the SEC or IRS.

Net result? US citizens are less capable of competing internationally in a world where the economic power is shifting overseas.

National Defense Authorization Act, 2011. Signed by President Obama on Saturday, December 31st with little fanfare when hardly anyone was looking, NDAA is the latest gem in a long line of liberty-destroying legislation that authorizes indefinite military detention (without trial) of suspected terrorists.

Thing is, NDAA provides a ridiculously broad definition of 'suspected terrorist', essentially giving carte blanche to local, state, and federal police agencies who no longer need to worry about justifying their decisions in front of a judge.

Don't worry, though. President Obama issued a statement acknowledging the controversy of the bill, but clarified that his administration "will not authorize the indefinite military detention without trial of American citizens."

Heartwarming. But hardly a secure guarantee. President Obama isn't exactly batting 1,000 on his promises to the American public, and future presidents certainly won't be obliged by the same pledge.

There are, of course, dozens of other examples. Obamacare. Dodd-Frank 'financial reform'. And now the Stop Online Piracy Act / Personal Information Protection Act.

Hey, these laws like SOPA and PIPA always have great names. Just like wars. Operation 'Enduring Freedom' was the moniker given to the early days of the US War of Terror. It all sounds very noble. The reality is always different.

Throughout history, governments on the brink of insolvency have routinely enacted similar policies. Sliding into economic obscurity, they'll engage in reckless, cannibalistic initiatives-- higher taxes, burdensome regulation, war, destruction of the productive class, etc. It only hastens the end game.

This time is not different. And we can expect more and more of the same. Up next will be new laws that:

- restrict cash transactions over a certain amount (Italy has already passed such measures for amounts exceeding 1,000 euros)

- nationalize pension funds and private retirement accounts (again, has already happened around the world from Ireland to Argentina)

- impose a national sales tax and reduce death tax exemptions (already at the forefront of the ongoing tax debate in the US)

- ban gold and silver personal holdings (if you think this can't happen, ask any of the 250,000 people who used to own Liberty Dollar coins before they were seized by the FBI in 2007...)

And more.

The thing is, every time one of these new bills crops up, there always seems to be a small resistance movement fighting it tooth and nail on the ground. Hence yesterday's SOPA/PIPA blackout. But ultimately, the political establishment wins.

It's impossible to shake the public from its apathy... to steer people from the mind-numbing drivel of prime time airwaves... to rescue them from the PSYOPS campaigns of the 24/7 news channels.

We can only take care of ourselves. Any money or energy spent fighting the government or rousing grassroots support is inherently better spent looking after your own interests and making sure that you and your family aren't victims of historical certainty.

And make no mistake, collapse of empire is a historical certainty. From the Babylonians to the Persians to the Romans to the Mayans to the Mongolians to the Ottomans, no empire is built to last. And the final years are anything but smooth-sailing.
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jparrie · Jan 20, 2012

Black_Sun said:

unless the lower chamber and the Senate are able to shore up enough votes to block the White House request, the debt limit will be increased by $1.2 trillion next Friday
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http://www.thenewamerican.com/usnew...otest-vote-as-obama-raises-debt-ceiling-again

While the Republican-controlled House voted 239-176 on January 18 to block the latest increase, that action was seen as little more than symbolic, since under last summer's notorious budget deal Congress agreed to allow for a $2 trillion increase in the ceiling in exchange for proportionate spending cuts in the federal budget.
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Black_Sun · Jan 20, 2012

thatguy said:

Jonesy said:

Both the Australian government and opposition leaders have in the last year hinted that allowing the banks access to the nation's super pool would be on the cards.
Click to expand...

Not mine
Click to expand...

Especially *yours*, if you're holding precious metals. Don't worry though, because after the bank lends out your gold, they'll replace it with an IOU. Its a fancy piece of paper with a lovely hologram on it, to prove its authenticity... some people say its better than gold

thatguy · Jan 20, 2012

Black_Sun said:

thatguy said:

Jonesy said:

Both the Australian government and opposition leaders have in the last year hinted that allowing the banks access to the nation's super pool would be on the cards.
Click to expand...

Not mine
Click to expand...

Especially *yours*, if you're holding precious metals. Don't worry though, because after the bank lends out your gold, they'll replace it with an IOU. Its a fancy piece of paper with a lovely hologram on it, to prove its authenticity... some people say its better than gold
Click to expand...

Not mine

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