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Current Events » in reply to Serious Insecurities concerning Social Security 'Reform'

What Ed said.
Tom Brosz — (archived)

The devil will, as you say, be in the details.

The ideal private-investment reform for me would be:

A: Voluntary. Nobody should HAVE to divest out of the standard system if they don't want to. However, one can tell how appealing the current system is to younger people in that there seems to be a universal assumption that EVERYONE is going to take up the option. See also: education vouchers.

B: A LOT of room between the eventual investments and the government. In my ideal system, the government would not have jack shit to say about where I put my money, with the possible exception of the investments having to match some reasonable and objectively-measured level of risk, return, diversity and other parameters. These parameters are constantly measured in the stock market by various third parties, and some of these could be used. No gold mines in Bolivia allowed.

In other words, the government can make a rule like "no more than X percent in a single fund or company," or something about the risk factor not exceeding a certain point, but should NOT be able to say "put it in this 'officially-approved' fund." I think we agree on this, and some of your ideas in this area are good ones.

If the government has any say about specific funds, it's a sure recipe for corruption and more government/corporate circle jerks (as if we don't have enough of those already). As much as humanly possible, hands off.

Needless to say, the government should not be investing any Social Security money in the private sector directly. Period.

People can make jokes about the T-Bills that the fund is now invested in, but that's probably the only safe place to put the money. Even if private investments create greater returns, it would again be a recipe for certain corruption and de-facto nationalization of some private entities if the government bought enough of some things.

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