January 22, 2004
Get ready for the lies...
President Bush mentioned personal Social Security accounts again, and one can be sure that he will be pushing them. In fact, I recall that that was one of his campaign promises.(Poor naive old-fashioned fellow, he actually seems to think that a promise is a promise.) It will be very good news for this country. In fact the numbers that are being run on this look astonisingly good...
But get ready for the lie. Scoundrel Democrats are already saying that Bush wants Granny to put her retirement nest-egg into Enron. Actually, there is no possibility of a plan passing that does not require investments to be prudently diversified. Index funds are being suggested as possible vehicles. People will not be allowed to put their SS dollars into cocoa futures. And all this won't even apply to Granny, she's too old.
It's a nonsensical lie, but expect to hear a lot of it from our Democrat friends. (Josh Marshall will doubtless find a more subtle subtle way to slip in the same evil blade.)
Posted by John Weidner at January 22, 2004 11:16 AM | TrackBackI ran the numbers for this myself several years ago when this idea first started floating around. Assuming a full working life at a janitor's pay at a modest return, the savings accumulate to about 1/2 a $$million bucks. Not bad. We could end working poverty in one generation (not that we haven't already).
Posted by: pedro at January 23, 2004 04:52 AMAllowing the government to divert everyone's funds into a list of approved investments is a bad idea. You've just given the government a huge influence over enterprises that are, or might be, part of that list.
Not only that, you've also generated enormous political pressure to protect the fortunes of a particular set of enterprises. Everything from favorable regulatory treatment, to looking the other way while the company in question commits outright fraud and other criminal abuses.
No, we shouldn't "divert" a portion of FICA; we should stop collecting that portion in the first place. Let people invest them in the stock market or outside of it; let them invest in longshot anti-aging research; let them invest it in a couple more kids while they're at it.
Or let them blow it on beer and hookers and keep working longer.
Or have we given up on the idea that human beings actually grow up and become adults at some point?
Posted by: Ken at January 23, 2004 09:15 AMRequiring prudent investments is not quite the same as having a list of approved investments. An index fund, for instance, is just a basket of stocks, such as the S&P 500. That would be a very reasonable requirement.
I didn't say what I thought should be done, but if I were writing the law, I would probably require a portion to be in prudent investments, and leave another portion elegible for "anything goes." Then people could make mistakes and hard choices without the risk of going so broke that we would have to bail them out...
I find your positions appealing, but only in a theoretical way. Not much connection to current politics.
Posted by: John Weidner at January 23, 2004 02:27 PMOther than the above objections,and the fact that too much money chasing too few good investments leads to bubbles, could anyone explain why we can't divert a part of each new family's income tax to an IRA for a newborne child. Set a limit of say $10k for diversion and take it off the top for as many years as it takes to reach the goal. Protect if from lawsuits and lawyers and in 60 years we could eliminate SS except for the old farts still alive. Contibute public monies for the really poor. Hell, let those who have good indications they can live that long start a similar IRA with same legal protections and we can get rid of SS in 30 years. Needs more work but why can't this be effective?
Posted by: augustr at January 27, 2004 12:46 PMSounds great to me. Make everyone a Capitalist and an owner...Add other government subsidies into the pot, and let people use their own accounts to pay for their own education, medical care, welfare...
Posted by: John Weidner at January 27, 2004 06:18 PM
