 |
 |
My Ball is Crystal, Yours is Glass
September 21st 05:28:42 PM
The opposition to personal accounts consists largely in the “safety net” analogy. That is, the Social Security program cannot include individual investment in the stock market because our government must provide some basic financial assistance in case the market crashes.
Let's forget for a moment that diversified accounts held for a long period of time almost always increase in value. The response to this opposition is simple: People can opt out of personal accounts.
That's it. The accounts are voluntary. No one will be forced to invest in the market. No one will be forced to increase his or her savings.
It is at this point that the argument changes a little bit. Most opponents of personal accounts, when pressed, admit that they would prefer a personal retirement account for themselves or their children. But, they argue, those “most at risk” may not make good investment decisions and may wind up losing money.
This is basically the safety net argument, but it's slightly more subtle. And it's a bit more paternal. The argument here is that people who, in the opinion of personal account opponents, should not invest in the market will decide for themselves that they can bear the risk.
So why don't anti-privateers allow wealthy people to opt in to personal accounts and forbid the financially unstable from doing so? Isn't that really what they want?
Maybe they can see that in a future of personal accounts, those who decided to opt out won't be too happy. And, not knowing how to take responsibility themselves, perhaps those “most at risk” will blame the people who told them not to invest.
Posted by Ryan Lynch
|
|
|
|
|
