Dave Hall wrote:

On Fri, 18 Mar 2005 14:30:23 GMT, "Jim," wrote:


Dave Hall wrote:



I want you to explain to the class how diverting a portion of the SS
tax money, already being collected, into a privately maintained (and
interest bearing) account would increase spending? The money is
already coming in, and it stands to earn a larger return for the
individual over the long term.

Now, the only thing that would suffer is the general SS fund. But if
you reduce the SS fund pay out to the people who opted to use the
private accounts, it should turn out to be a wash. Unless of course,
you are one of those government types who like to raid the SS fund for
projects not related to SS. If that money is no longer available to
be raided, then I guess it will cause spending in other areas to
increase. But they shouldn't be raiding SS in the first place.

Dave


Even Bush admits that private funds will do nothing to help the current
projected shortfall; in fact additional funds will be needed to make up
for that money diverted to private funds.


You make up for the money diverted by reducing the benefits to those
who put into the private accounts.

Money diverted to private accounts will only hasten the need for the SS
administration to start cashing in bonds.



Face it -- the REAL reason for the 'crisis" (and I have a hard time
accepting the term "crisis" for something 30-50 years down the road, is
that the money is already spent.


It is, in many ways, a pyramid scheme.



Comes time for the SS administration
to start cashing bonds (or as Bush described them "worthless scraps of
paper"), the government has to either come up with money or default.
Given the bonds held by foreigners, default would equal disaster.


Which is why I cringe when I hear democrats describe SS benefits as
"guaranteed", when they try to scare seniors and other people into
opposing private accounts. A private 401K has a better guarantee than
the SS fund, considering the fragile nature of the program.

So Bonds, guaranteed by the "Full Faith and Credit of the US" are worthless?

Dave