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Originally posted by Tyrone Slothrop
Sen. Corzine, who should know a thing or two about this stuff, on problems with privatization:
[list]Many privatization advocates rest their case on claims that seniors will enjoy better returns. However, such claims are misleading. First, they generally overlook the costs of financing the accounts -- the higher interest costs that future taxpayers will be forced to bear.
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I don't know what this means. Can you explaing why future taxpayers will face higher interest costs? Or is he conflating the concept of privatization with the President's plan to privatize through current borrowing?
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I can assure you it is pure folly to assume that privatized accounts will always increase in value and will be at a high-water mark at the moment when an individual retires.
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They need not be at the high-water mark, and he knows it. We are not talking here about a lump sum on either end. We are talking about people investing systematically over their entire working lives, and then drawing down the funds systematically over their entire retired lives. As such, the ups and downs of the market are minimized. It is very basic personal finance.
