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Politics : Just the Facts, Ma'am: A Compendium of Liberal Fiction
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To: Orcastraiter who wrote (26785)1/17/2005 9:59:47 AM
From: Oeconomicus  Read Replies (1) of 90947
 
"I don't see how having more money to invest helps cover the debt we incur to cover the transition."

The debt is being incurred anyway. The only difference is the government has to go to the market to borrow instead of issuing IOUs to the SS trust fund. Having contributions go into private accounts instead of the trust fund does not increase the debt - it only brings it out into the light of day. Likewise, it does not reduce the funds available to purchase that debt - it only brings it out into the light of day. Instead of owing it to ourselves collectively and obscuring the size of it, we owe it to ourselves individually and see it clearly.

"But aside from folks making bad decisions a market crash could precipitate failures of other institutions."

How is that different from now?

"Ok then, let them loan money to anyone with a good project and the collateral to secure the loan. I guess in this way the government would be competing with banks. But the government should be able to make capital work for the people just as any business can."

Why does the government need to do that at all? This isn't some underdeveloped country without functioning capital markets. The government need only provide such services when the markets fail to do so. Our markets work very well, thank you, in allocating resources to their most productive use and the government "competing" would only invite inefficiency and, in all likelihood, corruption. Look at Fannie Mae.
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