US taps G fund to avoid passing debt limit

[tsptalk]

I know this has been talked about on the board in other places, but I think it needs to be here in the TSP News forum also...

"WASHINGTON (AP) -- Treasury Secretary Timothy Geithner says the government has begun borrowing from the federal employee pension fund to keep operating without surpassing its debt limit."

US taps pension fund to avoid passing debt limit - Yahoo! Finance

 

[clester]

I know this has been talked about on the board in other places, but I think it needs to be here in the TSP News forum also...

"WASHINGTON (AP) -- Treasury Secretary Timothy Geithner says the government has begun borrowing from the federal employee pension fund to keep operating without surpassing its debt limit."

US taps pension fund to avoid passing debt limit - Yahoo! Finance

So, this is my question. Say the debt limit isnt raised does that mean our money gone if they never raise the debt limit?

 

[WorkFE]

What is amazing to me is that the TS can submit an 8 line letter to the politicians and play with $150B but we can't make a tax code fit in the library of Congress.
In any event the letter also says that TSP members would be unaffected.:embarrest:

 

[Boghie]

I have guaranteed that I will be unaffected. Just moved all of my 'G Fund' assets out.:cheesy:

Also, I have just made the final change to zero out Kalefornea's tax increase. Since I am not a member of the 1% all I had to do was estimate the sales tax and property 'tax' increase and negate those. Governor Brown is counting on my $150, he ain't going to get it.

Go Broke Kalefornia. Go Broke...

And, Timmy, hope you ain't borrowing on my 'G Fund' money. It ain't there anymore

 

[RealMoneyIssues]

I have guaranteed that I will be unaffected. Just moved all of my 'G Fund' assets out.:cheesy:

Also, I have just made the final change to zero out Kalefornea's tax increase. Since I am not a member of the 1% all I had to do was estimate the sales tax and property 'tax' increase and negate those. Governor Brown is counting on my $150, he ain't going to get it.

Go Broke Kalefornia. Go Broke...

And, Timmy, hope you ain't borrowing on my 'G Fund' money. It ain't there anymore

You are so Unpatriotic!!!

Obama: Paying More Taxes is “Patriotic” | The Blog on Obama: White House Dossier

 

[Kaufmanrider]

So, this is my question. Say the debt limit isnt raised does that mean our money gone if they never raise the debt limit?

I think your G fund money becomes like all those Social Security surpluses we keep hearing about. Just an IOU written on a piece of scratch paper with a promise that someone
will repay it.

 

[RealMoneyIssues]

I think your G fund money becomes like all those Social Security surpluses we keep hearing about. Just an IOU written on a piece of scratch paper with a promise that someone
will repay it.

They use the IOUs for toilet paper at the Capital Building...

 

[clester]

They use the IOUs for toilet paper at the Capital Building...

We know they're all full of it

 

[Warrenlm]

https://mninews.marketnews.com/inde...debt-limit-watch-countdown-treasurys-deadline

 

[RealMoneyIssues]

Pretty Graphic stolen from here:
Who Owns the U.S. National Debt? Summer 2012 Edition | MyGovCost | Government Cost Calculator

So is that TSP in pretty orange at 5.1%?

 

[Boghie]

So, this is my question. Say the debt limit isnt raised does that mean our money gone if they never raise the debt limit?

Nope,

Debt is paid before spending. There will be political gamesmanship. There will be demagoguery. And, there will be threats. But debt is paid before spending.

However, where does that leave our salaries. Debt is paid before spending, and our salaries are spending. Also, if Fitch's impending downgrade increases the cost of rolling over our debt every month than our weak cash flow situation will get weaker fast.

The only way the cash in the 'G Fund' can vanish is if they elect to default. That is one of the choices available. What a legacy that will be

 

[wavecoder]

time for amoeba to go birch-mode!

 

[James48843]

They use the IOUs for toilet paper at the Capital Building...

I.O.U's....kind of like Federal Reserve Notes, eh?

 

[RealMoneyIssues]

I.O.U's....kind of like Federal Reserve Notes, eh?

Backed by the full faith and credit of the US Government !!

Full Faith And Credit Definition | Investopedia

 

[burrocrat]

Backed by the full faith and credit of the US Government !!

Full Faith And Credit Definition | Investopedia

perhaps it should read "secured by the next two generation's potential productivity and pounds of flesh of the u.s. homosapien calf crop". make no mistake what the collateral for those iou's is: your blood, sweat, and tears. charge it forward.

 

[CrabClaw]

robbing Peter to pay Paul... nothing more. Actually robbing Peter to pay Peter :worried:

 

[RealMoneyIssues]

robbing Peter to pay Paul... nothing more. Actually robbing Peter to pay Peter :worried:

Good point, why do we pay interest to ourselves?

 

[CrabClaw]

Good point, why do we pay interest to ourselves?

I dont know.

This whole thing concerns me; Ye have little faith in the current state of affairs regarding our country's finances... and the people managing them.

The beast IS starting to consume itself.

 

[WorkFE]

Generally when banks are flush with cash or have an unlimited supply of cheap money you don't get crap on interest rates on your accounts. The reverse is true when money is limited. It would seem to me if the FED is limited on where they can go to borrow money, G funders should be earning better than 2% to borrow their money

 

[k0nkuzh0n]

Good point, why do we pay interest to ourselves?

To deter borrowing. If I could take out an interest free loan, I'd take out as much money as possible even if I don't need it...why not? As long as inflation stays positive, that money is worth more today than it will be tomorow.


Does anyone know if the G fund return rate rises when the government 'borrows' from it? I would think it would.