Social Security

[John Gelles <jjgelles@xxxxxxxx>]

	                    [ NOTE:
	The proposals by politicians and some economists,
	raised in the current election and discussed on PKT,
	to treat social security "funds", (for year's held
	only as memorandum obligations of the US government),
	as though they were private insurance obligations
	invested in common stocks, real estate and corporate
	bonds, are missing some answers to basic questions: ]


             INVESTING SOCIAL SECURITY REVENUES  OR SAVINGS
             IN COMMON STOCKS, CORPORATE BONDS, OR THE LIKE

             Why do we encourage one person to earn more than
        another, before they retire?  Answer -- to make them
        work harder than average.

             Do we want to encourage people to retire harder
        than average?  Answer -- no.

             Why would we want retirement to be funded the way
        we invest when we're working?   Answer:  In order to
        provide more money in retirement than otherwise.

             Is that the way to do it?  Won't some people have
        more and some less -- maybe MANY will have a LOT less?

             Look at all those people whose retirement was tied
        up in their own company's common stock and notes -- which
        became worthless.

             Many of these retirees rue the day their future
        income became dependent on common stocks and corporate
        bonds.  Can we not learn from past mistakes?

             If we want greater benefits to retirees, just pay
        greater amounts when they retire -- from general US
        revenues that derive from a system that turns sand into
        chips and turns oil, ore, coal and stone into everything
        else -- like the American system used to turn dirt and
        water into food.  (Now that we are killing the agri-
        culture support system, we may soon turn dirt and water
        into food shortages.)

             The volatility of the private enterprize system is
        not its strength.  Volatility soon leads to socialism,
        looking for stability.  The strength of private enterprise
        is its decentralized power and encouragement of initiative.

             We do not need to make the old poor to set the young
        free to exercise initiative.  If you would see even more
	initiative among the young, make it easier for them to
	borrow capital and lower taxes on its growth.

             If you would see more money for retirees, allow the
	system to produce more of the things money can buy.  Then,
	if the trend toward automation and robotics is unexpectedly
        reversed, and you are short of experienced human labor, we
	will let seniors work without social security penalty for
	earning a dollar by taking a job.


		John Gelles     -     jjgelles@xxxxxxxx