This morning David Dayen posted an FDL article entitled “Obama Warns Social Security Checks May Not Go Out August 3rd Without Debt Limit Deal.” It’s cruel of Obama to deliberately frighten old people for political gain. Worse yet, his claim is blatant bullshit.
SS books are separate from those of the Treasury, etc. The last I heard, SS can still cover their expenses from revenue. Soon, however, they will have to start cashing in some of their Treasury bonds to make ends meet. But, they have enough bonds ($2.6 trillion) for the next 25 years. After that, SS will have a 20% shortfall, which will require some additional revenue and/or benefit cuts.
In any case, the debt limit does not affect those bonds. They can be rolled over. Paying off a Trust Fund bond lowers the national debt, and thus a replacement of identical value can immediately be sold, say to China. Also, this debt, just like the rest of our debt, can be rolled over indefinitely with no need to raise taxes to pay it off.
I can understand a president not knowing something that wonkish off the top of his head — he has lots of other things to think about. But, what does it say of the competence of his advisers, and of the person, Robert Rubin, who advises him on which advisers to pick?
And, what of a president who continues to select and listen to technically incompetent advisers? Obama has embarked on policies that will shut down the American economy, and his advisers have no clue.