Wall Street will benefit of course. That is not necessarily a bad thing. The companies that people invest in will benefit also as more money will be available for R&D and growth. There will be more investment in America. People will spend their money to powerhouse our American companies and not send it into a largely irresponsible government program where much of it will just go to pay some whiney slob collecting SSI or else an illegal.
To answer Bully's referenced article against SS privatization:
Well, the current arrangements are going to go broke anyway. Do you think it might
just possibly be easier to "generate more money" than the current broken system? Seems to me anything is better than NOTHING.
Well, I think there may be more economic growth if more invest in the market. Right now, monies for SS are just taxes levied to pay the older generation. In one door and out the other. None of the tax money is being used for investment for growth in the market.
Also, returns on stocks can come from more than just growth (capital gains) - returns can also come from earnings. If there are no companies with any growth or earnings at all, then the whole system is in trouble no matter which system you use! This is a doomsday argument.
I agree, companies need more capital from people who invest in them in order to grow. As stated before the SS tax money would be put to good use.
Also, growth of a good individual investment account also relies upon one other essential ingredient that the government ignores:
Time. This refers to the great
power of compounding your money over time .
What dollars in the federal treasury today? SS today is a flow-through system. There is no actual "pool". With the new system there is actually a "pool" of
real dollars managed by individuals who actually own their own individual
real "pool". No congressmen will be able to directly touch their "pool". This means that peoples' money will be put to work for them in their investments.
Not true. If an account just got a minimum average return of 5% over a period of 40 years, the retirement fund would outstrip the current SS check. I can't understand why someone would be too stupid to invest in such a better retirement fund - unless maybe you are referring to the illegals who can't read the simple English instructions for basic investment.
Once again, this is looking at the big picture with doomsday in mind and with the mindset that the pie will never get bigger. Using the old SS system under such a scenario you are still robbing Peter to pay Paul. However, now there are not enough Peters. Maybe eventually only one Peter to pay one Paul. So what are you going to do?
There is nothing stopping people in a new SS system from buying government bonds is there? (if you want their typical low returns) Under the old SS system, they do not buy bonds - the incoming money from taxes is immediately spent.
No, it is not just betting on a
theory. It is happening elsewhere. Look at the success of privatization in Chile.
http://www.socialsecurity.org/daily/07-31-99.html Privatization means that people are in control of their own money and their own retirement. Who better to control one's individual retirement than the individual himself?
Initially, nobody is going to be affected as this program is aimed at the younger age group. There are still going to be problems with the older age group, especially the Boomer age group. But it is much better to deal with temporary problems while in the process of ultimately solving the the SS retirement problem permanently and building a better future for our country.
Maybe we should begin an investment program similiar to this to address our health issues as well.
