One of the big brothers sends this along, a story of a hearing held three weeks before the election before a subcommittee of Ways and Means in which a professor from the New School of Social Design advocated eliminating the Tax Advantage gained from IRA's and setting up a national pension system administered by -- you guessed it -- the government (social security in this case). All workers would be "required" to pay 5 per cent in, and the gubment would invest it in low yield bonds paying 3% after inflation. Here's why I don't like this plan:
1. Grows government--by definition, I don't like that.
2. Takes something that has had a long-term record of accomplishment--investing for retirement in the market--and replaces largely because of the present volatility. It is what I call "opportunistic socialism".
3. Opportunity cost--when the market is doing well, my 5% won't be working for me.
George Miller and Jim McDermott are card carrying members of the Wing-nut Caucus of the Democratic Party, but this is the kind of stuff that they are talking about on Ways and Means.