For those who are adept at handling money, and investing, this would be a boon. But I fear that many people would actually do worse if they had a choice over where to invest their FICA money.
That is what privatization means, isn't it? :wondering if I misunderstood the question:
rayb wrote: Bush tried to get this started... and it has since stalled...
I am against this. It is the basically government investing in private industry. Investors get a say in how a company is run. I know that a lot of companies aren't exactly run in the best way, but then again, government does not have a reputation for making organizations run better and more efficiently.
__________________
If ye love wealth better than liberty, the tranquility of servitude than the animated contest of freedom, go from us in peace. May your chains sit lightly upon you, and may posterity forget that you were our countrymen! - Samuel Adams
We have "privatized" community mental health here in Michigan, and guess what the "companies" got passed the legislature prior to everything becoming "privatized?" A law that allowed the community mental health providers, who are receiving funds from the state and federal government via Medicaid to provide the services to the mentally handicapped individuals, to be able to go back retroactively for 3 years and determine ability to pay for the services by the individuals and their families who receive the services. The "campaign" was fought under the banner of "reform and preventing fraud of the services so that the precious dollars aren't being squandered needlessly," essentially, and the voting public didn't understand what it really was and would do (and for those who don't have a handicapped child, why should they care anyway because it doesn't impact them). Instead, it turned into an additional way for these "for profit" firms to make more money. They get the money from Medicaid, they get to decide how and to whom to allocate it, and they get to decide how much you get to pay them back for the privilege of having services for your mentally handicapped child. Oh yeah, pay to play all the way, babe! The whole system has gotten corrupt and could be guilty of fraud, because there is little government oversight, and since they are private companies, their books and budgets and finances are not open to public scrutiny. And to further entrench themselves, they sub-contract stuff to other private companies, who in turn sub-contract it to other private companies. By the time the funds actually hit the consumer level, it is a pittance compared to what the Medicaid amounts originally were. And guess who audits them? No one. And if they are audited, it is by people in the contracting company one level above them. And do they find anything wrong? No, because then it brings them up into suspicion, and then it could eventually get back to the state government that something is amiss in the financial aspects...
No, the federal or state government may not be great at investment strategy, but they aren't there to skim a profit off what tax dollars are allocated for. Government bureaucracy replaced with private firm bureaucracy with essentially monopoly power that are not answerable to anyone if they can help it is not better. Social Security may be broke, and I may never see any of it when / if I ever make it to retirement age, but at least I know it isn't going to line the pockets of "consulticks" and "executives".
__________________
It seems to me the only thing you've learned is that Caesar is a "salad dressing dude."
I suppose it's debatable whether government should be involved with social security, but assuming that it's not going away, what's the best way to fund it? What is going to give the maximum return? By a wide margin, it's investing in private industry. The person would have a choice of which industry to invest in, so I'm not sure I'd see at as government investing in private industry. The unvarnished fact is, no matter how social security is funded, including the present system, the money comes from private industry. Government does not create wealth, it only takes it from others. That's why I get puzzled when people say that private investment is riskier because it depends on the success of business. But in fact, our government depends on the success of business. There would be no one to take wealth from if there were no private industry. So I would support a more efficient way to generate that wealth, that would involve greater returns.
This grand experiment that we call the United States of America is built on the premise that freedom creates prosperity. In order for that to work, we have to trust that Americans know what to do with that freedom. If we tell them what to do with their freedom it isn't freedom. I agree that freedom creates prosperity, and it's time we made social security part of that freedom and therefore increase our prosperity even more.
100% agreed with Cat Herder. Well put! Granted there will be corruption either method, it's really a question of which do you trust more? Big Brother or Big Pharma?
__________________
Ye hear of wars in far countries, and you say that there will soon be great wars in far countries, but ye know not the hearts of men in your own land.
- D&C 38:29
The thing about Social Security is that the way we understand it, it is supposed to be like a defined benefit retirement program (which many employers have abandoned). To maintain the defined benefit over time, typically, more money has to be put into the system so that the obligation can be met. Social Security was only meant to be supplimental to what was provided by employer pension plans. The way to fund it was through required employer contribution and required employee wage withholding. It was sold as a mandatory thrift program. And we all think we are entitled to get back out what was put in plus the growth in wealth the "savings" has generated over time.
What it has turned into is a catch all for all kinds of benefits and entitlements. We all know that. Moving Social Security to stock market based earnings as opposed to the lower risk of bonds, etc. is a way for the plan provider (the Federal government) to essentially do the same thing as employers did by making the bulk of "retirement" plans 401k based. They are not responsible for what happens, and they no longer have to guarantee a benefit. {edit to add} And, many do not even have to contribute anything as the employer {/edit to add}.
I apologize for being a little hot in the previous post. I saw "privatize" and went all medival . I was, in my stupor of thought, thinking that the government should be turning to the stock market to actually fund the benefits the Social Security system promises. My bad...
I don't think there is anything wrong in allowing individuals to have a say in how to invest a portion of what they have paid into Social Security, as long as the following conditions are met: 1. Individuals do have an account that their payroll taxes are going into that can not be thrown in the pot and x years later when you're ready to retire, you get your share of what is left over; and 2. investing the funds as the owner of the funds does not carry risk of loss of capital. Just like a savings account. You aren't guaranteed how much if any interest it will earn, but your investment capital is not at risk.
-- Edited by Cat Herder at 14:12, 2006-09-06
__________________
It seems to me the only thing you've learned is that Caesar is a "salad dressing dude."
