Follow this link to the editorial in the Worcester T & G.
I posted this response to this Editorial as a comment on the web site:
Wow, I cannot believe that I am seeing this as a T & G editorial. I have been advocating this since at least 2004.
Read the book – Rethinking Pension Reform, Franco Modigliani, Arun Muralidhar, Published October 2004.
http://www.cambridge.org/uk/catalogue/catalogue.asp?isbn=0521834112
It spells out a well thought out plan to modify Social Security investment policy in ways indicated by this editorial.
Imagine if Social Security had been allowed to invest at the depths of the market in March 2009. That investment by Social Security would already be up by 60% or more.
Previous publications by Modigliani and Muralidhar show even more detail than in the book. They had an FAQ that showed how they resolved just about every possible objection to their plan. Ted Kennedy was going to have them testify before Congress, but I don’t think that ever actually happened.
Follow this link to what I posted back in 2004 about this topic.
I received the following comment from Arun Muralidhar:
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I think the privatization folks have realized that privatization is a pipe dream (especially given that even the Chileans have reformed their system away from privatization) and the market collapse of 2008 demonstrates how individuals who were unlucky to be conceived in the wrong year and month could have been left in poverty at retirement if they were in DC plans. Also, the folks who support no change to current way of financing benefits have got to realize that a PAYGO system is unsustainable and leaves SS contributions very susceptible to small changes in population and productivity growth. The simple solution is to implement what we call “risk sharing through a common portfolio.” Because of continued inaction in Washington year after year (and squandered surpluses), there is a cost to be borne and it is currently a 1.1% permanent increase in SS taxes for all citizens – the worse part, if we keep delaying, the cost keeps rising as this is a ticking time bomb, but the fuse is long so Washington can kick the ball down the road to the next set of representatives!
The sad part is Congress is totally paralyzed (I tried contacting my rep, Congressman Rush Holt, when I lived in NJ and he claimed he did not have the time to meet and I was fobbed off onto a researcher). Someday, I hope that our elected representatives get a backbone to take this on and not strap our kids with a ridiculous tab for our inaction.
In addition to having a decent health care system, shouldn’t we ensure that we do not leave our retirees in poverty or plunder from our children to prevent such an outcome?
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