government-controlled investment :: essays research papers

Some argue that personal retirement accounts would be a mistake and that the government instead should set up its profess investment fund to help finance future benefit payments. The nice news is that this indicates a growing awareness that pre-funding (i.e., accumulating assets) is a necessary helping of Social Security reform.The bad news, however, is that government-controlled investment is the terms answer to the wrong question. It assumes that policymakers should focus solely on balancing the programs r veritable(a)ues and expenditures. This ignores the opposite Social Security crisisthe fact that the tax burden on straightaways workers is extraordinarily high compared to the benefits received ( very much referred to as the rate-of-return crisis).But even if balancing Social Securitys long-term finances were the and goal, government-controlled investment would be the wrong answer. This is because a government-controlled pension fund would non search the competitive pre ssure and legal obligation to make investments solely for the economic benefit of future retirees. As one expert has explained better-looking the federal government that power and control would create large risks for the rescue and for the retirement security of todays workers. The Congressional Budget Office, for instance, has warnedFor example, take the stand at the state and local levels with public employee pension fundsas well as evidence from similar arrangements in other nationsdemonstrates that politicians and their appointees often are tempted to steer the government-controlled pot of money toward special interests, political allies, or corporate contributors.In addition, even well-intentioned policymakers are not pendent to invest funds and manage money. Simply stated, they do not face the bottom-line pressures that force private businesses and investors to allocate resources wisely. Yet poor investment decisions provoke serious consequences. Most important, workers wo uld earn lower returns on their money, and even atomic differences in rates of return translate into less retirement income.