A ponzi scheme, as Tom wrote, might be an accurate conception of the
political drive to privatize social security. Assuming the money stays
in the US, wouldn't a large redirection of SS trust funds away from the
bond market and into the stock market likely reduce bond prices (by
eliminating the decifit-reducing bias of SSTF T-bill absorption) and
increase stock prices, thereby increasing short-term returns in both
financial markets?
Jeff Fellows
----------
From: [EMAIL PROTECTED]
To: [EMAIL PROTECTED]
Subject: Re: [PEN-L] Re: everything's groovy
Date: Wednesday, October 29, 1997 6:46PM
Jerry wrote,
>Whether the losses are recovered or not by the mutual funds
"investors",
>before you consider whether these people are going to pull their $ out
of
>the market, you have to consider their alternatives. Given the rates of
>interest on savings accounts, what choices do most of these
small-timers
>(including many retired working people) have? Some of those other
>choices (like municipal bonds) might be undesirable for other reasons.
I agree. But the issue isn't just whether "these people pull their money
out
of the market", it's whether these people and others borrow *more* money
to
put it *into* the market. There is considerable choice on that one. A
Ponzi
scheme that doesn't attract new investors is a sad thing to behold.
Regards,
Tom Walker
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