George Will reports Congress has a stake in the stock market, via the Thrift Savings Plan of $152 billion; a significant nest egg. I question the motives of Congress when they create legislation affecting the pattern of investment in the stock market. Certainly, the flood of money from the Social Security privatization plan would have a predictable effect on the stock market. Congress created quite a number of investment paths in the past for the citizens to invest tax sheltered in the stock market, thus supporting and expanding the value of earlier investors and enabling them an opportunity to cash out at a significant gain. Later investors dont always fare as well.
A critical point to address is the need for the government to enter into greater debt to support this very flawed plan. The amount of money the government is going to be looking for is going to induce a flow of investment cash away from the stock market, too. Moving to government debt will not be secure, either. The country would now be swimming in deep debt waters; the safety of government investment would be more questionable. Likely the members of the, Its all mine and you lose, party, would be some place else.
The citizens, who have benefited most from our government system, resent paying for it. The opportunity for a greater income is a benefit, and providing the means to it is a government investment. Investments include infrastructure, gifts, grants, no payback loans, and an occasional war over bananas or oil. A return on investment is a reasonable expectation. Yet, Congress has relaxed the tax or ROI on the most profitable segment of its investment, while increasing the tax on Social Security to carry its investments; and now proposes Social Security investors, having carried the others in many ways, take cuts and bigger risks. The crisis in the SS system is that the feds are avoiding the fact they have to pay the loans back. Had they been getting the proper ROI all along, they would not have run up the debt to such great heights.
Providing a trained work force is also at government expense. As more companies bring in foreign workers, legal and otherwise, or ship the work overseas, we hear a building chant to reduce educational costs. Right now, they seem to be at the more productive, cheaper, better teacher stage. If we listen carefully, are they saying: Lets do away with professional maintenance? The buildings can crumble; we wont be using them that much longer. There are private schools.
Would our country survive without all this public aid? We would still be here, but there would not be as many $5.5 million homes in the country owned by members of the, Its all mine and you lose, party. They would not have had the chance to collect wealth because of all the public aid. However, when and if it all falls apart, they will likely be someplace else.
Bruce W. Jacobsen is a resident of Machesney Park.
From the April 6-12, 2005, issue