Follow-up to critics...

John Tierney has written a follow-up column to answer critics of his earlier one, where he compared his Social Security return with that of a Chilean friend. Chile has "private accounts." The critics piled on him about the "risks" of the stock market, and he responds with the political risks of leaving your retirement in the hands of politicians, who can change things in the future...

...You can call the Democrats irresponsible obstructionists, but they're just following the first rule of politics: get re-elected. It's the same rule followed by the politicians from both parties who have spent the baby boomers' retirement money. Why set aside money for 2017 if it could be used to woo voters and campaign contributors for the next election?

I can't protect my pension against political risk, but Pablo can help protect his against the risks of the stock market. As he approaches retirement, he can gradually shift his money out of stocks and into bonds, like the ones that financed the private road between Santiago and the port city of Valparaiso, which will be paid off by tolls. The Chilean pension system has billboards along the road proclaiming, "Your savings are financing this highway, and this highway is financing your retirement."

Those billboards have been on my mind. My pension depends on 535 politicians who will be asked to vote for steep tax increases or budget cuts that they fear could cost them their jobs. Pablo's pension depends on people driving between Chile's two largest cities. (Thanks to Betsy N)

The talk of the risk of the market is mostly BS. Short-term there is risk. Long-term, if you have a good broad-based portfolio, you do not have risk, unless the entire economy goes into long-term decline, in which case there will also be greatly increased political risk, since the money simply won't be there to pay for political promises.

Either way, it all really depends on the economy, and what's the biggest risk to that (apart from things like asteroids)? Bad political decisions, that stifle growth with taxes or regulations or confiscations. And what's the best way to prevent them? Make everybody into owners, so they start to get a clue, that "the corporations" aren't evil parasites sucking their blood, as certain political flavors would like us to believe, but businesses that they are part-owners of...