"Dave Hall" wrote in message
news
On Thu, 31 Mar 2005 17:42:42 -0500, DSK wrote:

Dave Hall wrote:
So there is a fee involved. As long as the fee is much less than
interest earned, where's the problem?


The problem is that the gov't not the individual decides who gets the
profit.

But I gues that's "choice" in your book.

As long as they pick the funds and firms who represent the best return
for investment, I have no problem.

Dave


It seems that everyone is overlooking an obvious solution that seems to me
to have many advantages. The whole (supposed) motivation for partially
privatizing SS is the higher returns that the market will provide. The why
not have the SSA start redeeming the billions in treasury notes it holds and
use the cash, as well as part of current income, to invest broadly across
then entire stock market? This would in effect be a huge index fund and
would be vwey cheap and efficient to manage. The higher returns would go
into the general SS pot and be available to pay benefits in the future.
Advantages:

- Innumerable studies have shown that index investing gets a better return
than the majority of individually managed accounts, even those funds that
are managed by so-called pros. Thus most SS participants would be better off
than if they had individual accounts that they managed themselves.

- Untold billions of dollars that would otherwise be paid to financial firms
for managing the individual accounts will stay within the SS system, further
enhancing returns.

- No individual will be faced with an impoverished retirement because of bad
investment decisions or just plain bad luck.

- By redeeming some of the SS treasury bonds and not buying new ones it will
pressure the government (the non-SS part of it) to be more responsible
financially, to pay more attention to the budget deficit, and restrain
unfair tax cuts and unneeded spending.

But of course the Bush administration does not really want to "save" SS
(hence my "supposed") above. They want to do away with it altogether. This
(partial privatization) is the first step, just like the medicare
prescription benefit was the first step in getting rid of that government
program (by incewasing the program cost wile shifting more of the tax burden
to the middle class they hope to eventually built a lot of ppular
opposition). Bush himself is probably not smart enough to see what's
happening, nor are 99.9% of his supporters, but his neocon handlers know
exactly what they are doing.


--
Peter Aitken

Remove the crap from my email address before using.