Global warming got you down? Afraid you’ll never see a Polar Bear in the wild? Are you depressed about the high cost of gasoline? Does fear of acid rain (or acid reflux) keep you up at night? Concerned that your deodorant has failed? If so…

Welcome to the Sky’s Falling In Club (SFIC) which is headquartered in Washington. Membership is growing, thanks in part to people’s short attention spans (in the 1970s it was Global Cooling) and the 24-hour news cycle which runs on bad news.

While there are plenty of real-world things to be concerned about, SFIC is always looking for a gloom-and-doom crisis, real or imagined, to keep you and yours hopping.

For federal, postal and military investors the next “threat” is that Congress (if you are a Republican) or the White House (if you are a Democrat) is going to raid your Thrift Savings Plan. This comes up each time there is a deficit crisis and politicians, after blaming the other guy for it, play a game of legislative chicken, using the $225 billion federal 401(k) plan. The biggest chunk of money in the TSP is in the G-fund, which is made up of special U.S. Treasury securities.

Every couple of years Congress and the White House get into a pushing contest over raising the deficit. Each political party blames the other and tries to get maximum advantage before voting to increase the amount of money Uncle Sam can borrow. Some members actually have concerns. Many, however, use it as an excuse to pummel the other side.

Each time this has happened (it did under President Clinton as well as under President Bush, the Present) the warning cry goes out that TSP investors with money in the G-fund are going to lose money because the stupid White House/Congress (choose one) let things get in such bad shape. The idea of somebody tampering with their optional retirement nest egg infuriates many feds. And it would be terrible, if true.

But it’s not true.

Here’s how the TSP explains it:

The government has never raided the G Fund. The G Fund is completely comprised of Federal debt securities which pay investors a set interest rate. When the Federal debt reaches the statutory limit established in legislation by the Congress, new debt securities cannot be issued or reissued to the G Fund until Congress acts to raise the statutory debt limit.

Since the Congress often acts very slowly to raise the debt limit, in 1988 we secured permanent statutory protection for G Fund investors. Under that law, when debt issuances to the G Fund are delayed in this manner, all G Fund investors are made whole as soon as Congress raises the debt limit (as it always does eventually). Due to this statutory protection, all G Fund activities affecting participants continue to operate as normal. Whenever we confront this situation, we prominently display this information on our Web site.

For a good explanation of the current deficit fight, click here.

Nearly Useless Factoid

Liz from Education dropped us an email.

She says “I didn’t realize it, but these coupons are good for one gallon of gas at most retailers. I have seen them around, but until recently never took advantage of them. I never realized their actual worth.

You probably have one or two just lying around somewhere, now is the time to use them before they lose their value and it’s too late!!”

She attached a photo of the coupon:

Hope this helps!

To reach me: mcausey@federalnewsradio.com

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