When you look at Social Security and Individual Retirement Accounts you must not start your analysis on either of the them as something that is intrinsically useful, in isolation. The skeptic in me looks at both IRA's and the Bush SS Proposal as a means to an end . . . and end that involves giving up all investment locally in micro businesses or paying off home mortgage debt in favor of delegating investments to the 1920's style gambling pit called Wall Street. This too colors my objection to the state government's borrowing based on public pension funding 20 years out, or whatever, so as to buy more stocks.

[This was too large a post to comment over at BlueOregon.com; Unraveling the Social Security Propaganda, by Jenson Hagen,
http://www.blueoregon.com/2005/01/unraveling_the_.html]

The junk bond kings and the S&L scoundrels are happy as clams. But here is a biggie that I do not hear anyone whine about . . . all local business that are dependent on healthy local banks have been decimated by the emergence of monopolists or national franchises.

Do not look upon an IRA as a tax break for saving money, look upon the scheme as if there were a tax penalty for not delegating investment decisions to trustees that have a confined set of investment options . . . none of which involve paying off mortgages or investing in family businesses. The investment of social security obligations (not savings, but obligations) in the stock market is just another trick to feed the illusion that the numbers on an account represent real value.

The scale, though, of the conversion of national Social Security system to the whims of the stock market brings us just one step closer to the retirement pyramid scheme that took root in Albania, and then collapsed.

“Is every one in yet?” . . . “OK . . . now pull the plug and lets go on another merry round of increasing concentration and centralization through mergers and acquisitions.”

I suppose we need a few real pinko's around who have managed to read a bit of Marx to understand what is really going on here. Marx offered a critique of certain aspects of capitalism (and politics) more so than offering some idealistic economic model that was theoretically perfect. There is no perfect model, but the delegation of investment decisions to an ever decreasing number of hands is inefficient and prone to corruption. The model we are trying now, forecasting economic futures based on legal tweaking, has already been tried and disproved in the USSR. They at least only tried to forecast out 5 years while we are trying to forecast out 20, 30 or even 40 years with our actuarial studies on pensions and retirement accounts. Just call it our savings, without the funny names.

Veblen has a couple good points that one could read the looks to one's wealth relative to peers rather than relying on some fixed absolute thing like predictable CPI data that presumes predictable growth. The only thing different in the modern fact situation, rather than analysis that is a hundred years old, is that the communication tools to enhance centralization and concentration have improved . . . along with better instruments of propaganda.

Keep it simple . . man .. . someone is trying to line their pockets . . and it it ain't Middle America. Think S&L on steriods . . that is what I think of Bush's SS plan. It really is no different than the state scheme to convert future public pension obligations into an asset . . . an asset in some else's hand that involves compellable taxation of your neighbors and kids . . . where the obligor is the one dependent upon the stock market. The present staff of the Attorney General's office should be, conceptually, all gung ho for Bush's SS plan . . . except that they have a different subset of identified short-term political winners.

Think pink, not blue, and it will all make sense. Perhaps The Oregonian should argue that we delegate the decisions to expert actuaries (ha ha), just like they advocate for the Portland Police And Firefighter pension funds (which are more secure without adding market risk through full funding in stocks in lieu of pay-as-you-go).

UPDATE: When you convert a pay-as-you-go system into a fully funded one, it is more like a final pay off amount where the payor should be free and clear of all future obligations. The National Education Association has been so successful nationwide at convincing state treasurers that the teachers can have their cake and eat it too (full funding and guarantee against investment loss) that Bush could not help but capitalize on our collective idiocy. How could the NEA, today, come clean and admit that they had just pulled off one the greatest heists the country has ever seen? In Oregon we coughed up nearly 8 billion dollars in just the last few years (with a little less than half going to the members of the Oregon Education Association).

Will The Oregonian, today, say oops, maybe the full funding thing wasn't wise after all . . . for PERS. Idiots, or thieves . . . I know which one they are. SO . .. have the teachers, nationwide, been bought off at the state level, so that they will support President Bush's proposal on Social Security. This is really diabolical stuff.