[Homestead] Morning thought
Clansgian at wmconnect.com
Clansgian at wmconnect.com
Wed Feb 2 10:41:17 EST 2005
In a message dated 2/2/2005 10:17:21 AM Eastern Standard Time,
genegerue at ruralize.com writes:
> If investing in stocks and bonds is superior to the present system, why
> doesn't the government simply invest our Social Security funds there?
>
For one simple reason, it's against the law. This is central to the whole SS
topic. The government is not allowed by law to keep tax money, it must spend
it. One hears repeatedly that 'Well, if those greedy, slimy politicians
didn't spend all the money on other things, there'd be plenty for SS.!!" Greedy
and slimy they may be, but by law they HAVE to spend it all. Only one of two
things can happen to all the money taken in for SS this year, 1) it can be
distributed to SS recipients or 2) it can be given to the general revenue in
exchange for a promise to pay it back at some future time. Once it is in the
general revenue, it is illegal for congress to do anything with it but spend it.
They cannot themselves invest it in private stocks and bonds because of the
very real danger of conflict of interest.
The whole present SS system is based on the promise that if you pay your
money into it today, the government will squeeze funds out of workers in the
future to pay you. Actually, no such promise exists, it's more of a hope for those
being taxed now. Congress has the power to call off the whole scheme any
time it sees fit.
James
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