Quote:
Originally posted by ltl/fb
Short-term cash equivalents return 3-4% real interest? That surprises me, to the extent that I don't think I can believe it without seeing backup.
If SS becomes a pure welfare for old people system, it's no longer social security. If you are moving to this, why even bother having the forced savings? Especially if people can invest in whatever they want?
ETA who is going to administer the accounts? What a fucking recordkeeper nightmare. And what do they get invested in? Making it anything on the market complicates the recordkeeoping hugely, but there will be so much money that having a group of mutual funds probably won't work.
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Fringey, the research was stuff I did a number of years ago for a paper on tax policy when I was doing my LL.M. Remember, we're talking about a thirty-year time frame, which historically will include both a high interest period and a low interest period, since thirty years is a fairly good istorical approximation of the average business cycle.
The forced savings component is necessary because in order to move to a pure welfare system, you need to assure yourself that the system won't get overtaxed.
I have to confess, I never did come up with a foolproof accounting system. My best alternative was a 401(k) or IRA type of account, with a filing requirement for the annual account summary. Again, it's not a foolproof system. I just think it's better than what we have. And if I ever do work it all out, I will run for Congress.
