Quote:
Originally posted by Tyrone Slothrop
Let's just set aside the various issues relating to the performance of private accounts vs. the current system, and the desirability or lack thereof of the insurance function that we now have, and focus on transition costs. Money that comes in now is not invested. It's used to pay for current retirees. So doing what you propose will entail borrowing a big chunk of money. If this improves the system's finances as of 2052, this happens only at the cost of hurting our finances now. If you think the shortfall that we face in 50 years is a "crisis," it makes absolutely no sense to talk about borrow money to shift to private accounts. The conversation should be, instead, about tweaking the system in the ways discussed in other posts.
Your proposal is like my wife saying to me, we should buy a Mercedes, but I'm not sure about the costs. Well, sure. If money were no object, why not?
|
I understand all of this, but the main objection to personal accounts seems to be that we borrow lots of money for no net gain to the system. However, if the system were to share in the gain, the calculus is a bit different.
