Re: Soc Sec: How do private investment accounts solve the problem?

From: Robert Vienneau (rvien_at_see.sig.com)
Date: 02/12/05 

Date: Sat, 12 Feb 2005 05:32:06 -0500

In article <p8vq0159h6v2vte3kq71odcfudoc2sgrh3@4ax.com>, xenman
<xenman@sprynet.nospaam.com> wrote:

> As it was designed SS was an intergenerational transfer of wealth. Back
> in the 1930s, most working people were very poor when they were too
> old to work. Their last few years of life were pretty miserable. SS was
> the solution. There was no real trust fund, it was a pay as you go
> system.
>
> In the mid 1980s, it was recognized that demographics were changing
> and that pay as you go wouldn't work for retiring baby boomers. The
> SS tax was increased and the suplus "invested", so that unlike their
> parents, baby boomers would be partially paying for their own SS benefits
> when they retired. The problem was that instead of investing the excess
> of collected taxes outside of the Federal Government, they invested it
> inside and use the surplus of tax collections to reduce ongoing deficit
> spending. Had this surplus been invested outside government (meaning
> a basket of convervative stocks and bonds) , the SS problem being
> publicly
> discussed would not exist.
>
> There are lots of people that believe that there will be no problem for
> the Federal Government to repay the debt that it owes SS. Other believe
> that it won't be able to repay that debt.
>
> If you believe that intergenerational transfers are ok, then the current
> and foreseeable demographics work against you for reasons you already
> outlined. If you believe that people should pay for their own retirement
> then private accounts are the way to go.

Some advice for the original poster: as you can see on this thread,
many people who post to Usenet have no clue what they are talking
about. You could get an informed response to your well-taken
question by asking it on Max Sawicky's blog, MaxSpeak.

As Dean Baker has pointed out, there is no Social Security crisis.
Inasmuch as there are some minor issues that might be addressed a
quarter of half a century from now, private accounts only make things
worse.

This is another case where people speculate on Bush's motives. The
reasons he gives publicly for his policies, inasmuch as he has
policies, cannot be the real reasons. They make no sense. 

-- 
Mostly economics:  <http://www.dreamscape.com/rvien/#PublicationsForFun>
r           c
 v         s a           Whether strength of body or of mind, or wisdom, or
  i       m   p          virtue, are found in proportion to the power or wealth
   e     a     e         of a man is a question fit perhaps to be discussed by
    n   e       .        slaves in the hearing of their masters, but highly
     @ r         c m     unbecoming to reasonable and free men in search of
      d           o      the truth.    -- Rousseau

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