[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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