I’m finally coming around. #Bitcoin fixes Social Security. I’ve got the plan:
The Social Security Trust Fund now owns about $2.7 trillion in Treasuries. It should sell all of those Treasuries and buy Bitcoin. This buying will surely send Bitcoin to the moon, especially since a new QE program will be required to buy all the Treasuries sold by the trust fund.
Assuming the Social Security Trust Fund manages to buy 25% of all Bitcoin, and that by the time it buys its last satoshi, Bitcoin is at $20 million, the Social Security Trust Fund will be worth over $100 trillion. The unfunded liability of Social Security is now estimated at just $23 trillion over the next 75 years. The Trust Fund will have such a large surplus that there will be no more talk of tax increases or raising the retirement age. Everyone wins. The Trust Fund could then use all the Social Security payroll taxes it collects to buy more Bitcoin, supporting the price of Bitcoin and maintaining the value of its only asset.
There’s just one small wrinkle. With all Social Security tax revenue being used to buy Bitcoin, how will the government pay its benefits? It’s not like the Trust Fund could sell Bitcoin to cover those payments, as it would crash the market. So, like all true Bitcoiners, it must HODL.
Fortunately, there is a workable solution. The government declares Bitcoin a reserve asset, then deposits its Bitcoin as collateral at the Federal Reserve, which provides the cash needed to pay Social Security benefits. This arrangement is better for the government than the Fed holding Treasuries, as it doesn’t have to pay interest on Bitcoin, nor is there principal to repay. The Fed can simply HODL Bitcoin on its balance sheet indefinitely—the ultimate diamond hands.
After Bitcoin fixes Social Security, the government can move on to fixing everything else with Bitcoin. It’s too bad it took Satoshi so long to come up with this cure-all.
I wonder how many of the over 5K people who liked this post did so because they actually liked the idea, or because they appreciated the sarcasm and had a good laugh.
— Peter Schiff (@PeterSchiff) November 13, 2024