В каждой шутке есть доля...

[MaxSt]

http://www.theonion.com/news/index.php?issue=4048&n=1

WASHINGTON, DC—President Bush signed an ambitious Social Security plan into law Monday that will allow citizens to bet a third of their payroll taxes on their favorite sports teams.

"It's time we gave the American people the chance to make some real money for retirement," Bush said, speaking from the new Office of Social Security and Pari-mutuel Wagering Building. "Some naysayers think the average citizen doesn't know how to handle his own money. When spring training starts next year, it's up to you to prove them wrong."

"It's your money," Bush added. "You earned it. You should be able to bet it on whatever team you want."

Under the new plan, participating citizens will be asked to list their favorite teams on their W-2 forms. At the start of each major sports season, program participants will visit their local Social Security booking offices to review point spreads and sample playoff trees. Citizens' team selections will be subject to approval by their employers, who contribute a percentage of wages to the employee Social Security Earned Benefits Fund, or "pot," under the new system.

...

Several members of Congress have criticized the plan.

"While we do need to restructure our Social Security system, this isn't the way to do it," U.S. Rep. Bob Matsui (D-CA) said. "Statistics show that certain groups of people—women below the poverty line, for example—don't care about sports. I support an addition to the plan that will allow citizens who don't follow professional athletics to put a portion of their SSI payout into lottery tickets."

"Everyone deserves a chance at realizing the American dream, whether they like to follow the Rams or the PowerBall picks," Matsui added.

U.S. Sen. Rick Santorum (R-PA) dismissed critics who contend that the plan will cause a $2 trillion shortfall in the current funds being paid out to seniors.

"People can nitpick all they want, but there's a lot of money to be made if you take the time to do a little research," Santorum said. "Just look at this football season. With the Steelers leading the AFC North and the Eagles leading the NFC East, people in my state might have benefited handsomely from an opportunity like this."

Added Santorum: "Sure, we're risking a couple trillion, but I got a feeling people are gonna double that money when baseball season comes around, no problem."

Что-то в этом есть...

MaxSt.

[SlavickP]

Обожаю The Onion. Некоторые вещи у них - шедевры:

[...moderated...]

Или вот это:

Clinton Deploys Vowels to Bosnia

[vaduz]

(Reading a headline) No Way! That's great... We've Landed On The Moon!

[CEBA]

Borrow, Speculate and Hope
By PAUL KRUGMAN

Published: December 10, 2004

The National Association of Securities Dealers," The Wall Street Journal reports, "is investigating whether some brokerage houses are inappropriately pushing individuals to borrow large sums on their houses to invest in the stock market." Can we persuade the association to investigate would-be privatizers of Social Security?

For it is now apparent that the Bush administration's privatization proposal will amount to the same thing: borrow trillions, put the money in the stock market and hope.

Privatization would begin by diverting payroll taxes, which pay for current Social Security benefits, into personal investment accounts. The government, already deep in deficit, would have to borrow to make up the shortfall.

This would sharply increase the government's debt. Never mind, privatization advocates say: in the long run, they claim, people would make so much on personal accounts that the government could save money by cutting retirees' benefits. Financial markets won't believe this claim, as I'll explain in a minute, but let's temporarily grant the point.

Even so, if personal investment accounts were invested in Treasury bonds, this whole process would accomplish precisely nothing. The interest workers would receive on their accounts would exactly match the interest the government would have to pay on its additional debt. To compensate for the initial borrowing, the government would have to cut future benefits so much that workers would gain nothing at all.

How, then, can privatizers claim that they could secure the future of Social Security without raising taxes or reducing the incomes of future retirees? By assuming that workers would invest most of their accounts in stocks, that these investments would make a lot of money and that, in effect, the government, not the workers, would reap most of those gains, because as personal accounts grew, the government could cut benefits.

We can argue at length about whether the high stock returns such schemes assume are realistic (they aren't), but let's cut to the chase: in essence, such schemes involve having the government borrow heavily and put the money in the stock market. That's because the government would, in effect, confiscate workers' gains in their personal accounts by cutting those workers' benefits.

Once you realize that privatization really means government borrowing to speculate on stocks, it doesn't sound too responsible, does it? But the details make it considerably worse.

First, financial markets would, correctly, treat the reality of huge deficits today as a much more important indicator of the government's fiscal health than the mere promise that government could save money by cutting benefits in the distant future.

After all, a government bond is a legally binding promise to pay, while a benefits formula that supposedly cuts costs 40 years from now is nothing more than a suggestion to future Congresses. Social Security rules aren't immutable: in the past, Congress has changed things like the retirement age and the tax treatment of benefits. If a privatization plan passed in 2005 called for steep benefit cuts in 2045, what are the odds that those cuts would really happen?

Second, a system of personal accounts, even though it would mainly be an indirect way for the government to speculate in the stock market, would pay huge brokerage fees. Of course, from Wall Street's point of view that's a benefit, not a cost.

There is, by the way, a precedent for Bush-style privatization. One major reason for Argentina's rapid debt buildup in the 1990's was a pension reform involving a switch to individual accounts - a switch that President Carlos Menem, like President Bush, decided to finance with borrowing rather than taxes. So Mr. Bush intends to emulate a plan that helped set the stage for Argentina's economic crisis.

If Mr. Bush were to say in plain English that his plan to solve our fiscal problems is to borrow trillions, put the money into stocks and hope for the best, everyone would denounce that plan as the height of irresponsibility. The fact that this plan has an elaborate disguise, one that would add considerably to its costs, makes it worse.

And maybe the fact that serious financial experts, the sort qualified to be Treasury secretary, understand all this is the reason why John Snow has just been reappointed.

http://www.nytimes.com/2004/12/10/opini ... an.html?th

Щас придет LMG и расскажет про светлое будущее под мудрым руководством республиканской партии...

[MaxSt]

If Mr. Bush were to say in plain English that his plan to solve our fiscal problems is to borrow trillions, put the money into stocks and hope for the best, everyone would denounce that plan as the height of irresponsibility. The fact that this plan has an elaborate disguise, one that would add considerably to its costs, makes it worse.

Хмм... А что, неплохо Krugman все по-полочкам разложил.
Я хоть и не экономист, но схема достаточно прозрачная, чтоб даже я понял. Интересно, а что настоящие, серьезные экономисты по этому поводу пишут?

MaxSt.

[DV]

Хмм... А что, неплохо Krugman все по-полочкам разложил.
Я хоть и не экономист, но схема достаточно прозрачная, чтоб даже я понял. Интересно, а что настоящие, серьезные экономисты по этому поводу пишут?

MaxSt.

Так Paul Krugman и есть настоящий, серьезный экономист мирового уровня.

His biography.

[MaxSt]

А, так он профессор... Тогда ладно. Я почему-то думал, что он просто журналист.

MaxSt.

[CEBA]

Печально то, что никого трезвый расчет не остановит...

Social Security Reform, With One Big Catch
By EDMUND L. ANDREWS

Published: December 12, 2004


WASHINGTON

OF all the arguments being made to replace part of Social Security with private retirement accounts, few are more seductive and more misleading than the prospect of earning higher returns.

Get ready to hear a lot about this next week, when President Bush is host for a two-day economic conference that is expected to focus sharply on Social Security.

Under the current system, investment returns from Social Security are "abysmal," Mr. Bush said in one recent speech, because the trust fund is allowed to hold only low-yielding Treasury bonds.

Letting working people invest some of their Social Security money in the stock market would allow them to earn higher returns, giving them more money at retirement than they would have if they let the government do everything for them, the logic goes.

It sounds like a no-lose proposition. According to the Social Security Administration, Treasury bonds can be expected to yield a real annual rate of return of about 3 percent. Equities, by contrast, can be expected to earn 6.5 percent.

That assumption is crucial to arguments that personal accounts can reduce Social Security's long-term shortfall - which the government estimates to be at least $3.5 trillion. Most of the proposals to overhaul Social Security call for steep reductions in future benefits that would be offset by the higher returns people would presumably earn on their investments.

Stephen Goss, the Social Security Administration's chief actuary, has endorsed the assumption of higher returns. In evaluating the major proposals for putting some payroll taxes into personal investment accounts, Mr. Goss estimated that even people who hedged their risk by mixing stocks and bonds could expect an average return of 4.45 percent.

But that logic is as flawed as a perpetual motion machine. If it were true, the government could erase Social Security's entire projected deficit by selling bonds at 3 percent and buying stocks that yield 7 percent.

Why doesn't the government do just that? Because higher returns are inseparable from higher risk. No risk, no reward. And if the goal is to enhance security, if people are to have a solid reason to expect a particular level of wealth at retirement, the risks have to be relatively low.

"The entire argument is absurd," said William C. Dudley, chief United States economist at Goldman Sachs. "These returns weren't free. You are getting these returns precisely because you are taking on risk."

To be sure, one of the biggest ways to reduce risk is to have a long time frame. People who invest at age 30 or even 50 have the time to ride out most of the ups and downs of the stock market.

But there are no guarantees. According to Ibbotson Associates, which publishes data showing average returns over different periods, large-cap stocks actually suffered a loss of 1 percent, annualized, from early 1929 to the end of 1942.

Granted, it is somewhat unfair to pick a time period that begins just before the great stock crash of 1929 and continues through the Depression. But many analysts contend that it is even more misleading to suggest that people should have complete confidence in their ability to earn above-average returns with no risk whatsoever.

Surprisingly, the Social Security Administration actually goes further than that. In addition to relying on the premise that equities will yield higher returns than Treasury bonds, Mr. Goss of the Social Security Administration suggested that returns in the future might be even higher than those of the past.

"A consensus is forming among economists that equity pricing as indicated by price-earnings ratios may be somewhat higher in the long-term future than in the long-term past," wrote Mr. Goss.

"This is consistent with broader access to equity markets and the belief that equities may be viewed as somewhat less 'risky' in the future than in the past," he added.

If investment funds or stockbrokers made that kind of claim, they would probably be breaking the law.

In an interview last week, Mr. Goss acknowledged that many experts believe investment returns should be adjusted for risk and that the common proxy for a risk-free return is the real yield earned on Treasury bonds.

The Social Security Administration's analyses do include lengthy disclaimers, noting that the projected returns are highly "sensitive" to what happens in the markets.

But other government analysts take a much more conservative approach. The nonpartisan Congressional Budget Office, which is run by a former chief economist in President Bush's own Council of Economic Advisers, assumes that equities and bonds will earn no more than Treasury bonds.

Strikingly, the White House's own Office of Management and Budget recently made the same assumption. The issue was not Social Security but rather the projected growth of assets in the railroad retirement trust. In evaluating the railroad retirement system, the White House budget office also assumed that investments would yield the same as Treasuries.

BUT the more basic question is this: Should a rational person believe that Social Security's very real financial shortfall can be reduced just by shifting from bonds into stocks?

Those who imply that stocks can promise higher returns without higher risk are essentially arguing that Social Security can be fixed with a huge exchange of paper.

If that is the government's strategy, people should by all means push for the right to shift all their payroll taxes to personal accounts and invest the money in gold.

http://www.nytimes.com/2004/12/12/busin ... ew.html?th