Re: Bush and O'Reilly, in denial.


"Jim Blair" <jeb@xxxxxxxx> wrote

> I say the higher your income the harder it is
> to save 5% of it.


You have an interesting definition of "hard" there, Jim.


> Sure some investments do better than others. I claim that if people stick
> to broad based mutual funds, they are almost certain to do better than
> Social Security during the next 20, 30, 40 or 50 years.


How "broad based"? If some fund is based on anything narrower than the
whole US economy, it _may_ be one of those which do better than "the
economy" -- but it's just as likely to be one of those which do worse.

Yeah, yeah, your hypothetical fund can be based on the "world economy". But
if you want to collect your returns from an investment in Pakistan, say, you
need either:
1) the good will of the Pakistanis to live up to their contractual
commitments for the next "20 - 50 years"; or
2) a world government, with a court system you can sue in and a police
agency that can enforce its judgements internationally; or
3) a scarier military than we now possess.
I give Pakistan as the example because I don't imagine you're talking about
your "world" investments going into, say, France.


> So why keep the FICA?


Why indeed? I would happily endorse a system wherein _all_ income gets
taxed, at rates which are progressive all the way up (say, to a top marginal
rate of 95% kicking in at about $100M/yr), and retirement benefits are
means-tested -- and paid out of general revenues. Are you with me?

The CBO is hardly likely to "score" such a system for lil'ole us, but I bet
it would end up "revenue neutral" with considerably lower overall tax rates
for most people.


> Because more people would be putting money into investments
> instead of into the US treasury. (If we privatize SS.)


Jim, we both know that "putting money into investments" means, in real
terms, buying things and hiring people. The US government buys things and
hires people. But putting money into it is apparently _not_ an investment,
in your vocabulary.

Well, I can agree with you to some extent: buying anti-anti-missile
missiles and hiring people to man them does seem like a frivolous waste
rather than an investment. But I can't agree with you all the way.
Buying, say, college and graduate educations for young people, or
pharmaceuticals and medical care for working people, can actually be a very
good investment, given that you get to tax their future earnings.

We will never have a government wise enough to make _only_ good investments.
But we will never have mutual funds that can do so, either.

-- TP



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