GO FOR THE GOLD ON SOCIAL SECURITY
Not to give Dubya & Co any good ideas--- but, the only thing that makes sense given the dismal structural problems facing the US economy is: INVEST A PART OF THE SOCIAL SECURITY TRUST FUND IN GOLD!
Given that the world economy is on the verge of massive commodity price inflation, caused by the new middle classes in India and China and huge American deficits and debt.
INVESTMENT IN COMMODITIES LIKE GOLD, OR OIL SEEM LIKE THE ONLY REALLY SENSIBLE BETS.
GOLD DOES NOT REQUIRE YOU TO BELIEVE THAT THE POLITICIANS WILL "DO THE RIGHT THING."
In fact, if you hold Gold longer term, you might hope that the political class does what comes naturally to them--inflate the money supply!
But these "private accounts" that Dubya is touting sound like a massive amount of bookkeeping work----and with little or no benefit.
True, Wall Street will get their fees up front as usual.
But, the bookkeeping alone to post every bar-stool Bubba's "investments" would be mind boggling!
MANY OF THESE ACCOUNTS WILL BE MUCH MORE TROUBLE THAN THEY ARE WORTH!
HERE'S A MODEST PROPOSAL:
LET THE FEDERAL GOVERNMENT "DIVERSIFY" 20% OF THE EXISTING SOCIAL SECURITY TRUST FUNDS AWAY FROM US BONDS; AS FOLLOWS:
1. TEN PERCENT INTO GOLD AND OTHER COMMODITIES LIKE OIL AND GAS;
2. AND TEN PERCENT INTO A LIST OF THE 500 BEST "GROWTH AND INCOME" STOCKS, AS DETERMINED BY AN INDEPENDANT PANEL OF ECONOMISTS AND INVESTMENT EXPERTS;
PROVIDED HOWEVER, THAT THIS "GOVERNMENT PORTFOLIO" CAN ONLY BE ADJUSTED ONCE A YEAR, AND ONLY MINOR TRADING WILL BE ALLOWED DURING THE YEAR. (To avoid speculation by the market and the public, AND to cut costs)
If the stock and commodity markets are better than the bond markets for Social Security Trust Fund money??
We should TEST THE THEORY for TEN YEARS---BY AN ACT OF CONGRESS---FIRST!
BEFORE SETTING UP LITERALLY MILLIONS OF TINY MICRO-TRUST FUNDS FOR TENS OF MILLIONS OF WORKERS.
Hmmm.....No Accountant Left Behind....? And does Dubya's Plan really "simplify" anything? No way.
A side "benefit" of this plan would be that the goverment would be investing in gold, thereby "hedging" the "natural tendency" to debase the money supply.
Advise to Dubya?
Go for the Gold....and you might have something ......but these small accounts are a NON-STARTER.
Surely, there are better and cheaper ways to encourage "ownership?"
