What condition would we be in if we had done Bush's dopey idea of investing Social Security in th Stock Market
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10-13-2012, 12:16 PM
Post: #1
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What condition would we be in if we had done Bush's dopey idea of investing Social Security in th Stock Market
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10-13-2012, 12:24 PM
Post: #2
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When did Bush have that idea? He wanted to privatize social security. That does not necessarily mean the stock market.
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10-13-2012, 12:24 PM
Post: #3
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Well, suppose he wasn't a total dope and instead of giving people freedom to invest in whatever they want, he stuck to the plan that was floating around to give people an option between a few diversified funds. If people bought the stock market index, they still would have seen moderate gains since 2001, though they would have seen 14% losses since the market peak in October months that would be pretty alarming.
Of course, if we had pumped trillions of dollars into the stock market, it probably would have driven down the marginal returns - all the extra money would have gone to less productive investments, and the stock market as a whole would probably be riskier and growing more slowly. Also, the government finances and the dollar would be in worse shape, because the social security trust fund wouldn't be effectively lending money to the government at a low interest rate - we would be borrowing a lot more from the Chinese and Saudis than from ourselves. |
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