[[Investing SS money sounds easy ]]
I never said it sounded easy- I can envision a number of issues that would crop up- but you said in previous post that you didn’t think it a wise idea because the money would be going to ‘line someone’s pocket’ (in congress), and one has to ask how using money from treasury bonds isn’t also winding up in congressional pockets as the money they ‘borrow’ goes towards general funds and projects and likely towards special interest groups, who in turn provide kickbacks, perks or whatever after their palms are greased so to speak-
[[That makes them a part owner and requires them to vote on directors, potential takeovers, proxy battles.]]
I don’t know much about how that works, but isn’t there a situation where there are silent shareholders/investors?
[[It isn’t easy for even a large mutual fund to invest because their sheer size affects the market they are investing in. Multiply that problem exponentially and you’d have an idea of what investing SSA money would be like.]]
Provided you invest it all- that would be true- however, even Clinton toyed with the idea of investing a portion of SS in private markets
The way the system stands now, it basically amounts to double taxation- but investing in private would help offset that problem, and possibly give greater retrns
[[Speech by SEC Chairman:
The SEC Perspective on Investing Social Security
In the Stock Market]]
In it He rasies many of the concerns you hav,e but also offers solutions
“Government Influence and the Private Sector
In addition to investor protection and investor education, another aspect of Social Security reform includes the impact of government investment in capital markets.
Those who favor having the government invest the Trust Fund in the stock market point out two major benefits. First, it allows market risk to be spread across society and even across generations. Second, given the economies of scale that the Trust Fund could achieve administrative costs would be significantly lower than for individual accounts.
But, I know some, including Chairman Greenspan, have raised strong objections to the government owning stock in public companies. They point out that this could lead to political interference in deciding which companies to invest in and how those companies are run. Could the government invest in a tobacco company? What about a company that was a toxic polluter a decade ago? More broadly, assuming the government invests in individual equities as opposed to market indexes, would it be able to vote its shares? If so, how?”
http://www.sec.gov/news/speech/speecharchive/1998/spch223.htm
It’s a fascinating article/discussion/read- I can not for the life of me find that other article I mentioned earlier- I believe it was a NRO article discussing ways that the money could be used in private investments - I’ll keep looking htough-
“and one has to ask how using money from treasury bonds isn’t also winding up in congressional pockets as the money they ‘borrow’ goes towards general funds”
That’s a risk with all gov’t spending but it can be tracked when it’s done within an agency. Once it gets outside to a private firm there is far less accountability.
“I don’t know much about how that works, but isn’t there a situation where there are silent shareholders/investors?”
Class B non-voting stock. But there is no way that public funds should ever be put in that. In the event of bankruptcy that’s the last in line to be made whole. Class B stockholders would receive nothing. It would be a violation of fiduciary responsibility.
“Provided you invest it all- that would be true- however, even Clinton toyed with the idea of investing a portion of SS in private markets”
Clinton proposed partial privatization as did Dubya. And the quote you posted illustrates that Greenspan criticized it for the same reasons I’ve brought up. It puts the SSA in the position of voting on or controlling corporate policy, and considering the amount of money involved the SSA would be able to control a significant number of corporations.
The same leftwing activists who now use the EPA and the IRS to advance their agenda would flock to the SSA’s investment committee and they would have even more power to force their agenda on the country. And when it wasn’t the Left in control it would undoubtedly be the likes of the US Chamber of Commerce, another group with absolutely no interest in the American people.