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Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: chalu2 who wrote (19159)	5/19/2000 8:40:00 AM
From: DMaA	Read Replies (2) \| Respond to of 769670

Better return is only part of the [you left out risky] scheme. As I understand it, the citizen would morally and practically own the capital he puts into the 2% portion. SS is simply a welfare scheme where government makes the money it collects its own and doles out its out as it pleases. Bushes plan is a start in the right direction.

To: chalu2 who wrote (19159)	5/19/2000 8:56:00 AM
From: Zoltan!	Respond to of 769670

>>if the theory goes that stock market returns exceed current Soc. Sec. investment returns That's not a theory. That's a fact. >>why not simply invest SS money in stock index funds or trusts (like DIA on the NYSE), instead of pursuing this costly and complicated 2% scheme?????? 1) It depends. If you're backing the failed 1999 Clinton-AlGore the Junior scheme to, in effect, nationalize the equity markets which quickly became DOA after Greenspan et al chided it as nonsense or whether you back the Bush plan which would, in effect, allow the use of index funds by individuals, if they chose. AlGore the Junior now lies about his former position as he lies about Governor Bush's. 2) Political dynamics - the AlGore the Junior alliance of "Chicken Littles" isn't scaring anyone but the dimwits so far. 3) Your scheme is costly and a diversion from reform, while the Bush reforms present a huge opportunity for solving Social Security's looming financial crisis. And the Bush outline is not complicated, except to the "dense" as Senator Kerrey alluded to. "Mr. Gore is left to shout about "risky schemes" and "casino economics," implying that most Americans are too dumb to make their own investment choices. And maybe he can scare enough voters to win. But this also means he's allowing Mr. Bush to set the campaign agenda, as well as to quote Democrats such as Bob Kerrey, who once said regarding personal Social Security accounts that, "I believe in the dignity, not the density, of the American people." interactive.wsj.com

To: chalu2 who wrote (19159)	5/19/2000 4:04:00 PM
From: Brumar89	Respond to of 769670

No reason this couldn't be done. Stock market returns over the long haul have exceeded the return from holding Treasury securities. This won't solve Social Security's long-term financial problems though. The basic problem is the bulge in the populations age distribution, i.e. the baby-boomers. Right now, the baby-boomers are in their peak earning, saving and investing years. That's why the Social Security system is running surpluses now - receipts from taxes exceed benefits being paid out. That's also why the stock market has been trending upward for years. And why the long-term trend of stock prices will continue upward for some years to come. More investing = higher demand for stocks = higher prices. If some of the Social Security surplus were invested in an index of U.S. stocks, it would put even more upward pressure on stocks prices - as long as the surplus lasts. It would also put upward pressure on interest rates BTW. But eventually the baby boom generation will start retiring. As this happens, the amount of new investing will decrease, leading to lower stock prices. As baby-boomers on balance withdraw funds from investment accounts, the U.S. will experience the longest lasting bear market in stocks we've ever seen. The overall returns on U.S. stocks may go negative for one or two decades. A real fix of Social Security's problems can't come from financial changes, I don't think. We'd have to raise the retirement age further or something along those lines. One idea would be to massively (but selectively) increase immigration into the U.S. as long as the immigrants are younger than the youngest baby boomers.