To: DuckTapeSunroof who wrote (670956 ) 2/3/2005 12:39:48 PM From: Kenneth E. Phillipps Read Replies (2) | Respond to PAUL KRUGMAN: No. It's actually much more than that. We're a actually talking about – what’s happening here is payroll tax revenue being diverted into private accounts, and because that's revenue that's no longer there, it's -- the federal government is going to have to borrow to make up the difference. And what looks like -- as best we can make out is it's a trillion dollars in the first decade, another $3.5 trillion in the second decade, and continuing onwards. Again, I don't think anyone's plotted out this one directly, but the plans we have all looked at suggest that the budget deficit will be higher than it otherwise would be until about 2050. Then maybe there would be some positive stuff, but we're really talk about borrowing trillions and trillions of dollars to replace the monies that being diverted into private accounts, and the only way this comes out as a possible benefit is if those private accounts do sufficiently well on the stocks that make up part of the investment to offset the borrowing costs. So, if you distill the whole thing down to the essence, it's the U.S. government borrowing to buy stocks, but shifting the risk. This is the really important thing: shifting the risk onto retirees. It's not -- there would be -- we could have -- it would be bad enough if the federal government were just going to borrow to buy stocks as a way of doing something, but what it's actually doing is borrowing on your behalf, you the retiree, telling you, “Well, you know, you might want to put some of this in stocks,” and then saying, “Well, if it does badly, well, that's your problem.” democracynow.org
