PRESIDENT GEORGE W. BUSH Message Board

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Politics : PRESIDENT GEORGE W. BUSH

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To: Wayners who wrote (677737)	3/31/2005 2:48:53 PM
From: DuckTapeSunroof	Read Replies (1) of 769667

"When TIPS first became available I thought wow now the budgets are really going to explode. But what really happened was these instruments weren't very popular. Beats me as to why." Probably because their yield is lower then regular Treasury bonds (the CPI is a heavily manipulated government statistic) and --- if they are held in a non-tax-sheltered account, you must pay taxes each year on the 'implicit capital gains' of the bonds... even though there ARE no capital gains until maturity or they are sold. Even so, I think this idea is an EXCELLENT way to bring about private accounts for Social Security. People would start out with real TIPS bonds deposited in their SS accounts (NOT in the 'SS trust fund'... but in INDIVIDUAL accounts), and there would be NO MULTI-TRILLION DOLLAR EXPLOSION of the federal deficit, as there would be under the President's woe-begone 'plan'. Later on (maybe in a phase II in a couple of years) people could be allowed to DIVERSIFY into other types of investments in their private SS accounts, by buying funds, stocks, other types of bonds, etc.

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