tag:blogger.com,1999:blog-8640715116021555600.post3913128914296582276..comments2023-07-04T08:26:11.131-04:00Comments on Sleepy Eyed Whiners of the Deep: Investing and the GOP vs. DemsUnknownnoreply@blogger.comBlogger2125tag:blogger.com,1999:blog-8640715116021555600.post-5772110457191004512008-11-01T17:19:00.000-04:002008-11-01T17:19:00.000-04:00NBC - appreciate your comments and glad you're ope...NBC - appreciate your comments and glad you're open to the idea. The only thing is, the "trust fund" is a fallacy, an accounting sleight of hand. There is no trust fund. The money in the "trust fund" or that old "lockbox" Al Gore used to talk about, has been spent, loaned to the federal government to meet other obligations. What's left for the trust fund is nothing but a bunch of IOU's, worthless for investment purposes.<BR/><BR/>No, what I want to see, is the individual be allowed to invest say 2% of the employee portion, and 2% of the employer portion (that's really the employee's money, too, but I'll play along with the illusion) in stocks, bonds, funds. I think the federal government has a 401(K) or similar plan. While we're extending the FEHBP to everyone, why not add their thrift savings plan as well. <BR/><BR/>This could be phased in for younger workers, and made optional, perhaps for those, such as myself, who are older and may not want to risk any money in investments,<BR/><BR/>History definitely shows us that investors who spend 25-40 years investing in the market, do pretty well and outpace the meager "earnings" of SS.<BR/><BR/>Anyway, thanks for your thoughts. Something needs to be done.Jayhttps://www.blogger.com/profile/17870722050000888929noreply@blogger.comtag:blogger.com,1999:blog-8640715116021555600.post-35420158798662155642008-11-01T16:02:00.000-04:002008-11-01T16:02:00.000-04:00As far as the idea of putting some of the social s...As far as the idea of putting some of the social security trust fund into the stock market, I generally like this idea, with a few reservations.<BR/><BR/>My first reservation is that I don't want to see a few firms or banks controlling all of the social security funds that are invested. I would like to see it spread around to mitigate risk.<BR/><BR/>My second reservation is the disproportionately large share of the market that a chunk of the social security trust fund could command. In this case, government investing could actually influence stock prices directly and I don't feel very comfortable with that. The amount of money in the social security trust fund could definitely be the 800 pound gorilla in the market.<BR/><BR/>I think the money that is currently in the trust fund will have to be left alone. Touching that money right now would spark outrage among people that are counting on social security. I would be in favor of starting to divert some of the dollars that are going into the trust fund into some sort of an index fund that is well balanced between sectors and companies, so as not to unduly influence stock prices, to provide strength to the market in general, and to minimize risk. <BR/><BR/>At most times, the stock market will provide a greater return than securities, and at those times, then it would be appropriate to sell stocks if needed to cover social security shortfalls. <BR/><BR/>I think we would have to have a significant amount in securities to prevent the need to "sell low" during economic downturns. If necessary, these could be sold instead of stocks to cover a social security shortfall, until the market turns around.<BR/><BR/>A good balance of securities and stocks could greatly improve the long term solvency of the social security system. Social security is too important to too many people to make a rapid fundamental change. In my opinion, it would need to be incrementally phased in.<BR/><BR/>If properly implemented, with an eye on the long term, it could eventually relieve the concerns for long term solvency of the social security system. Eventually, if returns on the portion invested in stocks do well enough, we could even see some relief in payroll taxes.Navy Blue Cougarhttps://www.blogger.com/profile/04038101146366045772noreply@blogger.com