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TWT's "idle thoughts" may be the most important points generally avoided in the current political "debate" on SS. I see so many rip-roaring articles about how SS is a rip-off, we could do so much better choosing our own investments, politicians and elitists liberals are squandering our money and underestimating our smarts, etc.

But there ain't no free lunch! Shifting billions from Federal debt instruments to private stock markets is a shift of numbers on papers and disk drives -- it does not create actual wealth. The SS trust fund might gain more dollars (in the long run), but that may be offset by higher cost of public debt. Stock investment returns (dividends & capital appreciation) are ultimely driven by corporate profits, but there isn't that much shortage of stock market investment for funding investmentworthy efforts to produce more or generate more profits.

There may be winners (windfall for stockbrokers) and losers, but it is unclear that this would generate more real wealth overall. If a bigger share of corporate profits goes to SSA via this route, surely a lesser share must go to all other investors. None of this may be bad per se, but none of it creates more or better housing, health care, or other goods & services to go around. None of it appears likely to address the basic demographic problems that SS faces.

And I don't think it elitist to be concerned about the risk. About 40% of American families have no meaningful investment experience whatsoever - that is many millions of people. And what is affordable risk for a higher income person who will have significant assets and several other retirement income sources, may not be so affordable for a lower income person more dependent upon SS.

Few of the critiques I see about rate of returns from SS take into account the non-retirement benefits, such as disability. The last I looked, SS was still returning over 99% of all contributions and investment earning in cash benefits. It seems pretty efficient at doing what it was designed to do.

More idle thoughts. burneb
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