Current Events — HabitableZone

Current Events » in reply to re: What Ed said.

Investment stuff
Tom Brosz — (archived)

The problem is, Tom, is that your system practically assured that 1-5% of retirees will have invested in dumb stuff and will be foisted back on the taxpayer to pay for.

That seems to imply that for a large majority of the investors, the investment will pay off. If the investment system is balanced against reducing benefits for those that hit pay dirt, why doesn't that work?

Plus, it assures an inflation of the Government to regulate risk behavior and monitor investing practices, diversity etc- even for just the 'low bar' you set for government involvement. 'Traditional' SS son't go away, because as you say, its voluntary.

Many third party systems are already in place to rate investments (Morningstar comes to mind--you'd want to use more than one). The government just needs to set certain limits based on existing parameters. Working with this doesn't require any more of a bureaucracy than it does to declare that a conforming house loan has to be less than a certain amount of money.

And then if we go the 'Hyper Government' route, the US Gov't becomes the single largest stock-holder in the history of the world at worst, and at best merely imposes politically-vulnerable and possibly corrupt judgements about what we can and can't invest in.

I fully agree on this. The government should not own equities directly, in these massive quantities, and I would go to the ramparts to prevent it. Talk about back-door socialism.

"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."

So your argument is we should privatize so that private citizens can do exactly what the government is doing (T-Bills) for the same return? That doesn't exactly leave me excited.

You might have misunderstood my fuzzy use of the word "safe." In the context, I meant "immune from corruption," not safe in the financial sense.

There are a lot of reasonable investments that can easily outperform treasury bonds. As always, the key is diversity, and arranging the portfolio to be appropriate to one's age group. For example, a lot of stocks are great for younger folks. Not so hot for those getting closer to retirement, so some ability to adjust this would be part of it.

It's important to remember that nothing is set in stone, yet.

And hey, check out the Tyrannosaur in the living room. Medicare.

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