Kinsley's Proof That Social Security Privatization Won't Work

[reprehensor]

Kinsley's Proof That Social Security Privatization Won't Work

The logic is not very complicated:

1. To "work," privatization must generate more money for retirees than current arrangements. This bonus is supposed to be extra money in retirees' pockets and/or it is supposed to make up for a reduction in promised benefits, thus helping to close the looming revenue gap.

2. Where does this bonus come from? There are only two possibilities-- from greater economic growth or from other people.

3. Greater economic growth requires either more capital to invest or smarter investment of the same amount of capital. Privatization will not lead to either of these.

a) If nothing else in the federal budget changes, every dollar deflected from the federal treasury into private Social Security accounts must be replaced by a dollar that the government raises in private markets. So the total pool of capital available for private investment remains the same.

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Also: The Meathead Proposition

Another Irrefutable Argument Against Privatizing Social Security

[vpigrad]

1. Exactly

> from other people.

Exactly! They want to steal from us to put it in their rich friend's pocket!

> Greater economic growth requires either more capital

And Bushie's scheme take capital away from businesses.

[applegrove]

2. Read the article. I almost died laughing my AO

[NickofTime]

3. Here's a Very Analytical Explanation for Another Reason

http://www.safehaven.com/showarticle.cfm?id=2357&pv=1|P/E Problem>