government-controlled investment :: essays research papers

well-nigh argue that personal retirement accounts would be a mistake and that the judicature instead should set up its own investment fund to military service finance rising benefit payments. The good news is that this indicates a maturement awareness that pre-funding (i.e., accumulating assets) is a necessary component of Social aegis reform.The baneful news, however, is that government-controlled investment is the faulty answer to the wrong question. It assumes that policymakers should focus solely on balancing the programs r correctues and expenditures. This ignores the other Social Security crisisthe concomitant that the tax burden on at presents workers is extraordinarily gamy compared to the benefits received (often referred to as the rate-of- bribe crisis).But even if balancing Social Securitys long-term finances were the only goal, government-controlled investment would be the wrong answer. This is because a government-controlled pension fund would not face the co mpetitive crush and legal obligation to make investments solely for the economic benefit of future retirees. As one expert has explainedGiving the federal government that s pot and control would create large risks for the economy and for the retirement security of todays workers. The Congressional Budget Office, for instance, has warnedFor example, severalise at the state and local anaesthetic levels with public employee pension fundsas well as evidence from similar arrangements in other nationsdemonstrates that politicians and their appointees often are tempted to steer the government-controlled pot of money toward special interests, political allies, or corporate contributors.In addition, even well-intentioned policymakers are not qualified to invest funds and practice money. Simply stated, they do not face the bottom-line pressures that force private businesses and investors to apportion resources wisely. Yet poor investment decisions have serious consequences. Most importa nt, workers would pull lower returns on their money, and even small differences in rates of return translate into less retirement income.