From: Joseph Marsden <marsden.joseph@worldnet.att.net>
Michael Jones wrote:
"If the money were invested in private sector bonds (or equities),
that investment generates real economic wealth. The government
cannot create wealth, only redistribute wealth."
I disagree. There are innumerable government expenditures that create (or preserve) wealth. The highway system is just one example. What I do think is true is that, rather than just by default leaving all of Social Security's investments in government securities, some judgement should be made as to whether the funds would be better off turned back to private industry through stock or bond purchases.
It should be remembered, also, that while indeed the ability of the government to pay its debts depends upon its ability to raise tax revenues in the future, the ability of private companies to pay its debts and to earn profits depend upon their ability to continue to provide desired goods and services through their investments. I think that financial markets are quite correct in their opinion, as indicated in relative interest rates, that the risk of the government failing in this regard is far, far less than the risk of private companies.
