Subject: SS public investments vs private investments
Peter Ferrara of the Americans for Tax Reform says in the Briefing Book about private accounts:
"These vastly greater benefits would result not because the private sector would make better investments than Social Security. They result because Social Security makes no real investments at all. Social Security is a tax and redistribution scheme where almost all taxes paid today are immediately paid out to current beneficiaries on a pay-as-you-go basis. The private invested system, by contrast, pours its funds into real private capital investment that produces new income and wealth. That increased income and wealth is what finances the far higher returns and benefits of the private system".
This is why all politicians Democrats as well as Republicans are in favor of some kind of private investments. The key questions are :"Who will do it?" and "Where will the money come from?".
The Democrats want the government to invest on behalf of the workers and want to take the FICA taxes for that purpose;the Republicans want to open individual accounts and some like Bill Archer want to give a tax credit to the workers for that purpose.
Why is it necessary for the money to make a round-trip? Why not allow workers to allocate a percentage of their check such as 2% directly to their Social Security account using systems similar to 401(k) plans?
I wonder whether the reason is that the Republicans do not believe that a strictly private system would find a majority.
