Bush Lies to the Good People of Mississippi

From Holden:

In the post below I mentioned that our president said the following in Mississippi today while promoting private accounts shortly after he claimed (again) that the Social Security Trust Fund contains only paper “IOUs”.

This is part of a retirement plan, and so you’ll be given the options to choose a conservative mix of bonds and stocks. If you don’t want to take any risks, you can put it in government-backed Treasury bills. But a government-backed Treasury bill gets a greater rate of return than the money that we’ve got in the federal government. In other words, this is a chance to earn more — watch your money grow in a better way through a conservative mix of bonds and stocks.

Forget for a moment (if you can) the imbecility implicit in the claim that “government-backed Treasury bill gets a greater rate of return than the money that we’ve got in the federal government” and focus on the interest earned by the Social Security Trust Fund compared to that of T-Bills.

The Social Security Administration says that the combined trust fund (OASI for workers and DI for the disabled) earned more than 5% interest last year…

The numeric average of the 12 monthly interest rates for 2004 was 4.271 percent. The effective interest rate (the average rate of return on all investments) for the OASI and DI Trust Funds, combined, was 5.678 percent in 2004.

While Business Week reports that T-Bills are currently earning 2-3%.

So even if you make the president’s statement somewhat coherent by comparing T-Bills to the Social Security Trust Fund as he apparently intended, “government-backed Treasury bill gets a greater rate of return than the money that we’ve got in the [trust fund],” he’s still a liar.