Chulu2, we can never be assured of anything. A meteor shower could hit the world next year and kill all life. Perfect assurance is not what is needed. What we need to do is come to thoughtful conclusions based on reasonable assumptions.
Assumption 1.
People controlling their own retirement money will invest it better than the government.
Assumption 2.
The present system does not provide for long term sustainability unless taxes are raised, or benefits sharply curtailed. Since more and more people are getting older, the older generation will vote to raise taxes on the young in order to pay for their benefits, instead of cutting them.
Assumption 3.
If the people of Chile can set up a privatized social security model that works reasonably well, America can too.
Assumption 4.
The value of the stock market will continue to outpace inflation when dealing with a minimum 20 year cycle.
Assumption 5.
Having people invest a portion of their social security funds in the stock market will create more capital for businesses, which in turn will help them grow and provide more and more jobs.
To me, this is such a no-brainer it's pathetic! If government workers can do it, why can't the rest of America? Are they more intelligent than the average american?
No system will ever be perfect. To believe we must have perfection in order to improve the current social security model is not realistic. If I am beating my head against the wall, all I need to do is stop first.
The plan of (optionally) investing a paltry 2% of ones income in the stock market is way too conservative to me. We should allow people to invest 100% if they choose.
The hysteria I've seen around the boards of SI toward this proposal of George W's is ludicrous. People seem to be saying. Yes, I am smart enough to invest my retirement money, but joe-blow is not.
There is a word for that kind of thinking, but right now it slips my mind.
Michael |
