Thursday, March 03, 2005

Hell has finally frozen over

That is a big extreme, but the Dallas Morning News and I finally agree on something! In this morning's story on Social Security:

In the meantime, Republican congressional leaders say they cannot guarantee a vote on Social Security legislation this year – a potentially fatal delay for Mr. Bush's top domestic priority. "The prospects are somewhere between poor and miserable," said analyst Stuart Rothenberg, who publishes a Washington-based political report.

Overhauling the 70-year-old Social Security system will only get harder as the calendar inches closer to the 2006 mid-term elections, congressional officials say.

And the longer the debate takes, the closer Mr. Bush is to becoming a lame duck.

Can I call them or can I call them. Actually, I'm worried that it means I'm wrong and that DMN is agreeing with me because they're wrong, too. Stranger things have happened (like me and Zogby making the same Electoral College Prediction).

Hat tip to Ed Kilgore guest blogging at TPM.


At 3:07 PM, Blogger Lorenzo said...

Here's my question. Why is SS structured as a generational transfer? Why isn't it a PENSION FUND? Pension Funds have a long tradition of providing for the financial and health requirements of retired Americans, until they get raided by corporations who have been fiscally irresponsible.

If Social Security is going to start losing money in 2042 then we have 37 years in which a hypothetical Pension Manager employed by the SS Trust Fund could invest 100% of the SS surplus in Stocks and Bonds and Mutual Funds and start to build up a Social Security Endowment that will bridge the gap until the population stops contracting and starts expanding again. Look at the returns that CALPERS gets, or Berkshire Hathaway. If you have enough money and competent management, allowed to invest *wherever* the investing is good (even overseas), then you will never go broke no matter what happens to one stock market. Think of steady, strong earnings for years and years and years. There are Pension Fund Managers with the skills required to manage a massive portfolio like this.

The dangers, of course, are corruption and political meddling. The Government might simply raid the endowment and give it out to rich people as a tax break. But that is already a danger, has already happened to the "trust fund", and the private accounts plan will simply allow the corruption to be local, closer to the retirees and harder to defend against.


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