RE: Trust Fund cynicism - right mood, wrong target

[James <jamesk_51@hotmail.com>]

>From: "Steven H. Johnson" 

>>>>Let's try this from a different angle.  The practical question is this:  Should the existing relationship between the Trust Fund and the Treasury be kept as it is, or changed?  And, if it should be changed, in what direction?  And why?

>>>>Continuing to treat Social Security as a programmatic part of the federal budget simply is not appropriate as it builds a substantial pool of assets that rightfully are held in trust for people outside the government.

>>>>>From a prudent financial management standpoint, a much longer arms length relationship is called for. 

>>>>Otherwise, the Congress is exposed to an extraordinary degree of temptation, on a perpetual basis. 

Steven,

I must disagree with the entire philosophical basis of your argument.  Whether the bureacrats are in Treasury or SSA, or whether we must begin to invest in private securities to accumulate the needed sums, or whether employers must send in an additional check to a different address or whether the Gov't securities are internal or external, these are really minor issues in the big scheme.  The problem I see is that you want to isolate the management and decision making from the only group that is directly answerable to the people: the politicians.

Even you admit that there has been no 'loss' in the current SSTF.  All the money is there.  Compare that to the S&L; crisis, where the taxpayers took a bath.  We isolated the risk-takers (the taxpayers through the gov't) from the investment decisions.  Developers could easily attract capital for risky investments because the gov't was guaranteeing S&L; deposits without adequate oversight.  It is not just fraud that was the problem, it was people making legal but risky investment decisions with somebody else (i.e taxpayers) taking the risk and suffering the consequences.  That is a recipe for disaster.

It is not only politicians who suffer from 'temptation'.  That is a basic human trait.  That much money will tempt everbody who comes in contact with it.  The politicians are the one group upon which we exercise any type of control. Individual accounts provide the built in mechanism of each person making the 'risk' decisions they personally are comfortable with.  When we have the gov't extracting money from us to 'invest', they damn well are responsible to us for that investment, and they can only do so if they are in control in some matter. 'Arms length' and 'independence' is not what we want in this matter.  Responsibility is what we want. And it is the duty of the citizens to 'enforce' that responsibility in a democracy.  There is no 'free lunch' on that matter.