Re: On Government Trust Funds


"William F Hummel" <wfhummel@xxxxxxxxxxx> wrote

> The idea of prepaying into the SS trust fund didn't really make sense.
> There is no way the government can store large amounts of the public's
> money for future use. However the public can save for the future by
> buying Treasury securities.


Do members of the public have to buy Treasury securities _individually_, or
can we kind of like pool our money together into some sort of communal
retirement fund to buy Treasury securities with?


> In fact most of us already own Treasury
> securities, at least indirectly through bank deposits, mutual funds


Ah! I though so :-)

Seriously, William: suppose we had enacted "private accounts" back in 83.
That is, suppose we had kept the payroll tax at pay-as-you-go levels, but
_required_ each worker _individually_ to purchase long Treasuries with his
"prepayment" portion. Keep the rest of history the same so that, to first
order, the aggregate of retirement bonds held by individuals, now, would be
the same as the "trust fund" is, now.

Tell me how that would make the accounting different, today. Tell me how
that would make reality different, today. Or tomorrow.

-- TP




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