Word: socialism
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Dates: during 1990-1999
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PLAY THE STOCK MARKET. By now there is wide agreement that stock and bond markets could in effect pay much of the nearly 30% of pensions that Social Security taxes will eventually no longer cover. But who should invest how much of the system's money? Clinton's proposal to have the government do the investing is a poor second best--and not only because of the danger of political manipulation of business. More fundamentally, individuals ought to have some say in how to invest money that the government taxes away from them. Redirecting some Social Security money into individual...
...portfolio 60% of which is invested in stocks and 40% in bonds would grow on average 5.5% a year. That represents the actual average from the end of World War II until today, minus an allowance for administrative costs. By contrast, the special Treasury bonds that, by law, Social Security must now buy with any spare cash it has may yield on average less than...
...many pensioners, present and future, would be terrified of having their retirement income depend heavily on the short-term ups and downs of Wall Street. They would have to be guaranteed a fairly high pension still paid out of regular Social Security taxes--currently 12.4% of each employee's wages, split between worker and boss--no matter what...
...suppose sharpies bamboozle Grandpa into buying stock in Fraudulent Uranium Co. or Flim-Flam.com Not to worry: the law should allow only competent and honest professional managers to bid for Social Security money--and require them to offer a wide choice among funds making highly conservative to more adventurous investments, which is roughly the deal enjoyed today by employees in company 401(k) plans. In any investing, some risk is inevitable, but probably less than the risk that pensions would be slashed to keep a completely tax-financed system sound...
DEFLATE THE FATTEST PILLOWS. Social Security was meant to keep the elderly from falling into poverty when they could no longer work, not to plump up an extra cushion under the already well off. Investment banker Peter Peterson proposes paying full Social Security benefits only to those whose income from other sources is $35,000 a year or less. Payments to the better off would be reduced on a sliding scale starting at 7.5%; those with outside income of $185,000 or more would receive only 15% of the Social Security pension that they would qualify for without such...