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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Hawkmoon who wrote (113574)	3/30/2008 4:41:48 PM
From: neolib	Respond to of 306849

But certainly deficit spending should not involve entitlements.. They should be "pay as you go". IMO, the Social Security surplus FICA tax revenues should be approved for individual investments by private investors. While the market environment currently might seem to make such a prospect overly risky, over time the private market returns far exceed those of T-bill interest rates. 100% of people who are not working are supported by the existing workers in society. It does not matter if the "savings" the non-working are living off of is T-bonds in the "fictional" SSTF, CD's, stocks, bonds, gold, or $ under the mattress, etc. Either we cut the benefits for retires in the future to what the workers of the future can support, or possibly, we cut the benefits to retires now (or find similar savings from other areas of government) and "invest" those funds now in ways that grow the economy, so that the workers of the future will be able to support the retires of the future in finer style @ less pain. Unfortunately, by far the largest fraction of "growing" the economy, hinges on valuation of elements of the economy such as assets, or projected demand for goods and services (i.e. stock valuation) which as we are seeing with mortgages need not be rooted in any intrinsic reality. I know that one might argue that if we here in America are wise with investing, future retiring Americans can live in better style based on the worlds workers rather than our own workers, via all the assets we will have accumulated. I seriously doubt it would play out that way. Fundamentally, the USA has 15% higher Federal Tax then is popularly claimed, and this tax is regressive (hits the lower dollars only), and applies to wage earners only rather than investment income for some odd reason. I say do away with SS & MC, merge the tax into Federal Tax, redo the rate structure, and if anything, reduce taxes if possible to allow the economy to grow a little faster. The only thing that will help future retires is better productivity, so growing that faster is the best strategy. I would still link retirement benefits to tax paid in during ones life. The main redeeming factor of SS & MC is that it links a basic level of support for most Americans. Private accounts would result in much more income inequality over time, unless the government enforced some amount of equalization, which IMO would be hard to do.