AARP: Where Are You? Like Greece: Lurching From Crisis to Crisis

Hypocrisy


 
Updates

January 15, 2013: Wow, some days I feel just so vindicated. After writing the original post, "anonymous" said that Congress paid the bills and that they were all paid or they were not paid, suggesting that I was wrong when I said the President (i.e., the Executive Branch) prioritized spending once we bumped up against the deficit. And tonight it's being reported. The executive branch, in this case, the Secretary of the Treasury is foregoing "paying" or transferring funds to the federal pension program so other bills can be paid.  I won't post comments if it would embarrass "anonymous." Sometimes I wish I did.

Original Post

The President has apparently drawn a line in the sand. He has prioritized "payment" cuts if the debt ceiling is not raised.

#1: Social security payments
#2: Veterans' pensions

The first group were members of Tom Brokaw's "greatest generation."

Of the second group, "all gave some, some gave all."

And so it goes.

Not on the short list:

• Congressional pay
• executive pay
• White House staff pay
• First Family vacations
• Obamaphones
• payments to government defense contractors
• debt payments to China
• Medicare payments to Fortune 500 health care insurers
• unemployment benefits that were recently extended to 99 weeks (from 26 weeks)

It should be noted that it was not Senator Harry Reid drawing up the short list (of two items). It was the president who was re-elected in a landslide.

Cue up Connie Francis.

However, good investors will look for the silver lining in this announcement. Who will the winners and losers be? The big winners: credit card companies, companies specializing in reverse mortgages, and loan sharks. It's pretty much impossible to invest in the latter, and I don't know a lot about the companies offering reverse mortgages, but I do know that Discover Card, MasterCard, AmEx, and Visa are easy to invest in. The president only said payments would be delayed. Perfect for short term loans on credit cards. Mastercard is down $6 today; Visa is pretty much flat; AmEX is relatively flat, and ... Discover Financial Svs is down about 1.5%.

Again, this is not an investment site. Do not make any investment decisions based on what you read here.

Overheard at the diner: When social security payments are delayed, more seniors will die of the cold in February who cannot pay their utility bills than the number of polar bears that will die due to global warming.

[Remember: it's the Treasury that determines the order in which bills are paid. Not Congress. Some folks who have written in are confused by all of this. Tim Geithner has already done this, and it has been widely reported on CNBC. In fact, if push comes to shove, the House will pass a bill prioritizing payments and taking this out of the hands of the Treasury. Of course, constitutionally it won't go anywhere -- it wouldn't be voted upon in the Senate in any event -- but the media would have a field day with it, with photographs of Congressmen depositing their paychecks while Social Security recipients wait for theirs. This is not rocket science. ]

[Incidentally, by including Social Security payments on the short list, this is a tacit admission that Social Security is no longer self-supporting. Apparently, already, Social Security payments are being paid from the "general fund" and replaced with Al Gore IOUs. I had not thought of that. Thank you to readers. [Update: wow, huge error by reader who sent this in; I completely missed it. My error and it was a doozie. See comments below -- this was my reply to the individual who caught the error: Wow, you are so correct. Huge error on my part. I did not catch that. I held off publishing this comment for 24 hours to see if anyone else that this huge error. You were the only one. That speaks volumes about ... well, probably that not many read my non-Bakken stories. Smile.

However, that really begs the question. If Social Security is solvent, why are Social Security payments being delayed even in the discussion about the debt ceiling? By the way, this is how the funding works for Social Security.]

[It appears some folks are still confused by all this. The best recommendation: ignore everything written above and simply read this AP lede, taken verbatim from the top news story of the day:

President Barack Obama demanded on Monday that lawmakers raise the nation's $16.4 trillion federal debt limit quickly, warning that "Social Security benefits and veterans' checks will be delayed" if they don't and cautioning Republicans not to insist on cuts to government spending in exchange. 

It seems pretty straight forward for those who have at least an eighth grade public education.]