Just the Facts, Ma'am: A Compendium of Liberal Fiction Message Board

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Politics : Just the Facts, Ma'am: A Compendium of Liberal Fiction

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To: Orcastraiter who wrote (26775)	1/16/2005 9:06:44 PM
From: Oeconomicus	Read Replies (1) of 90947

"I still see the transition costs as a problem. The only way to bridge that is with borrowing. I'd kind a like my government to stop borrowing." I think I addressed that - you'll also have more money in the hands of investors, with no choice but to invest it. "But even with a privatized system we'd still have to have the government guarantee the funds against fraud and fiscal mismanagement. What happens to the system if you have a stock market crash or Bond market bubble?" A crash or bubble is not the same thing as fraud. Investors concerned about volatility and risk can invest in less volatile investments. "And how does inflation or deflation and the rise and fall of interest rates affect a bond mutual fund based system?" The same way it does under the current system - inflation is effectively a tax on wealth, deflation a tax on debt. As for the rest, I don't much care for the idea of the government teaming up with private financial institutions to try to direct investment to "targeted projects". The market does a better job of allocating resources than any central planners ever could.

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