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To: KeepItSimple who wrote (35516)	1/20/1999 11:47:00 AM
From: Raymund W	Read Replies (1) \| Respond to of 164684

Wednesday January 20, 11:07 am Eastern Time Greenspan opposes investing Social Security in stocks WASHINGTON, Jan 20 (Reuters) - Federal Reserve Chairman Alan Greenspan said on Wednesday he would not support investing Social Security funds in the stock market, as proposed by President Bill Clinton in his State of the Union address. ''What I do not support and did not support previously was the investment of government funds, especially Social Security trust funds, in private securities, especially equities,'' Greenspan told the Ways and Means Committee of the U.S. House of Representatives. Clinton proposed on Tuesday to invest up to $700 billion of Social Security funds in the stock market and subsidize retirement savings accounts -- the biggest change in the U.S. retirement system's financing since its inception 64 years ago. Greenspan said government investment in private markets would interfere with the efficient allocation of resources in the economy. ''Because I do not believe that it is politically feasible to insulate such huge funds from a governmental direction, I'm fearful that we will use those assets in a way, which one, will create a lower rate of return for Social Security recipients, but even a greater concern, that it will create sub-optimal use of our capital resources and those assets which create our standard of living,'' he said. Greenspan also told lawmakers his first preference would be to continue to run government budget surpluses and use them to pay down the national debt, but he added: ''If we have to get rid of the surpluses, I would far prefer reducing taxes than spending it. Indeed, I don't think it's a close call.'' Related News Categories: currency, international, options, US Market News Help Copyright © 1999 Reuters Limited. All rights reserved. Republication or redistribution of Reuters content is expressly prohibited without the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon. See our Important Disclaimers and Legal Information. Questions or Comments?