Quote:
Originally Posted by KSig RC
Right - the way to solve a cash-strapped system is to suddenly remove tons of money from it. I can't see this becoming anything but a run on the bank, and a huge boon to mutual funds and similar (which will dilute the market, meaning the actual investors make very little). Then what? You'll replace Social Security with social services, a much less efficient system. It'll cost more, not less.
The government sucks at money management, I'll agree there. Most people suck much worse, unless the millions of "Check Into Cash" places operate at a loss.
Additionally, aren't there some logical inconsistencies with what you're saying? If there's no money/"the IOUs are no good", then what is there to actually withdraw?
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1. If more people move into the market the price per share will increase. As long as a bubble is adverted there will not be a problem. Bubbles usually occur when the risk is concentrated. Remember that the shares of mutual funds have %'s (usually small) of varying companies and types of businesses/companies/industries. The risk is spread out.
2. Tough stuff if most people suck at money management. Put the money in the least aggressive fund and go from there. There is such a thing as risk versus reward and if someone does not know how to invest they can put it into MM funds or even CD's backed by the government (similar to FDIC). I really don't care. People must learn to take care of themselves.
3. No if there is no money it is time to chuck it and start all over again. Those who don't want to invest their own funds can invest through a government guaranteed program at a minimal % return. But my suspicion is that most persons under 50 will chose to invest their own funds as they see fit. It is time for all of us to grow up and take responsibility for our own care and retirement. SS has never been designed as a retirement plan but only a safety net. Over time it has ballooned into the monstrosity it is today.
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