On Sun, 23 Jan 2005 14:37:19 -0500, maru <[EMAIL PROTECTED]> wrote: > Nice post Erik. Now your previous ones make more sense (to me, anyway). > But one thing: In your proposed allocation, the 25% bonds would be US > Treasuries. That would still be vulnerable to the attack that it is > merely the gov.'t lending itself money. So why not high-quality > corporate notes, or at least foreign gov.'t debt? > Is there some drawback to investing thus? > > ~Maru
Erik's post seems more consistent but wrong. A Question of Numbers "Social Security could capture the return on stocks, without putting individuals at risk, by investing in equities directly. This would also achieve another frequently stated objective: keeping the government's hands off the Social Security trust fund. That option would be far more efficient, in economic terms, than separating the money into 150 million disparate accounts. Costs are much lower for one big investor. And more important, in a system of individual accounts, benefits will vary with individual choices, and some people will make poor ones. In Sweden, where the retirement system has included private accounts since 2000, the majority of Swedes made excessively risky investment choices by putting money into stocks at the market top, according to Richard Thaler, a University of Chicago behavioral economist. Finally, pooling the investment pools the risk, and thus reduces the danger of retiring at the wrong time. In a system of personal accounts, someone who retired after a market crash would be out of luck. "So it is notable that all the current proposals to privatize involve the economically inferior option of individual accounts. But privatization advocates aren't motivated solely, and perhaps not even primarily, by economics. Glenn Hubbard, Bush's former top economic adviser, wrote in Newsweek that an ''obvious objective'' of privatization is ''to advance the president's ownership society agenda.'' Such pro-free-market sentiment has a long lineage. Remember Senator Vandenberg, who fretted in the 30's that public ownership of private securities would amount to socialism? Even though state pension funds and some U.S. agencies, including the Federal Reserve, put some pension money in stock-index funds, conservatives still react as if such a solution for Social Security were akin to turning it over to the Kremlin.... " http://tinyurl.com/3kk77 As the GOP on the hill is rapidly abandoning Bush on Social Security privatization I see no need to correct others misguided opinion postings at this time... Gary Denton Easter Lemming Liberal News Digest - I think Brin was onto something in 'Earth' in suggesting the right to vote be dependent upon subscribing to some opposing viewpoint media. _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
