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Subject:  Re: Don't worry about boomers killing the market Date:  8/3/2006  1:54 PM
Author:  JAFO31 Number:  52932 of 88074

OldOne: "Do you own any shares of a mutual fund? If so, someone is investing money which is not theirs for you. And they are charging you a fee for doing it.

If you put your money in a bank, the bank invests it. The bank is investing your money for you. If they didn't they could not pay you any interest."

<<<<Listen, I know the whole argument, but the fact is that SS is not a 'pay & invest' system. The money you put in now goes to today's retirees (or soon anyway). Your money will come from workers around the time that you're retireed.>>>>

"Your second and third sentences tell me that you absolutely do not know "the whole argument". SS has run a significant surplus in the past and continues to run a surplus. Rather than investing this money in a responsible fashion, the government has spent it. If the management of a mutual fund did this, they would be tried, convicted and jailed."

You cartainly mix your concepts in an interesting fashion. Many mutual funds and banks to invest in government debt, which is not significantly different that what SS does. In addition, this is all that the law allows SS to do with the surplus. I also knwo that if SS starting buying stock and exercising ownership rights (like say CalPERS), you would complain about government ownership of and interference with private companies.

"Spending the surplus is not something that GW Bush invented. I has been going on for half a century."

You may want to check your facts. Significant surpluses did not exist until the Reagan Presidency.

"Under the 1983 Amendments to Social Security, signed into law by President Ronald Reagan, a previously enacted increase in the payroll tax rate was accelerated, additional employees were added to the system, the full benefit retirement age was slowly increased, and up to one-half of the value of the Social Security benefit was made potentially taxable income.

As a result of these changes, the Social Security system began to generate a large surplus of funds, . . . ."

"In early 1968 President Lyndon Johnson made a change in the budget presentation by including Social Security and all other trust funds in a"unified budget." This is likewise sometimes described by saying that Social Security was placed "on-budget."

In the 1983 Social Security Amendments a provision was included mandating that Social Security be taken "off-budget" starting in FY 1993. This was a recommendation from the National Commission on Social Security Reform (aka the Greenspan Commission).

Thus, in this rather complicated fashion, the Social Security program was again off-budget by FY 1985."

Going off budget made the Reagan deficit look smaller. As it has made every deficit for every President since then.

I would be mroe careful about this hallf-century argument. Spending the growing surplus and disguising off-budget was revitalized in the 1980s during the Reagan Presidency.

Regards, JAFO

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