Social Security is a comfort blanket in a risky world
Yglesias puts his finger on why letting Social Security beneficiaries direct the investments of SS assets is a bad idea. Putting SS funds into the stock market is not necessarily a terrible idea. Letting SS participants pick the investments is:
A large body of research indicates that individuals are not well-equipped to engage in speculative investments, and experience teaches that financial managers are moderately well-equipped to duping people into paying management fees.
Comments
I completely agree and the Republican push to treat SS like a 401K was one of their dumber talking points.
My fix for Social Security is to require it to be self-sufficient. on an annual basis. Whatever SS tax revenues come in can be paid back out. If tax revenues decline then there is less to be paid out. The size of the pie is what it is and if more people want a slice than they will each get less.
This is the only rational way of treating the program. Otherwise we end up where we are today with trillions of unfunded liabilities and a system that is going broke and no political will of fixing it.
Posted by: Dan | August 31, 2010 10:08 PM