Comments on: Government Guarantees http://willwilkinson.net/flybottle/2004/11/10/government-guarantees/ The Sweet Release of Reason Thu, 09 Feb 2012 18:11:50 +0000 hourly 1 By: Brooke http://willwilkinson.net/flybottle/2004/11/10/government-guarantees/#comment-1896 Brooke Mon, 15 Nov 2004 14:04:00 +0000 http://www.willwilkinson.net/flybottle/?p=523#comment-1896 Bob, Private retirement accounts in lieu of Social Security would never be invested entirely in Enron stock. When you have highly diversified mutual funds and your investments range not just among different companies but among different sectors, the rate of return is almost always better than the return from treasury bills. People seem to think that private accounts means that people will be picking and choosing individual stocks on their own: no serious reform proposal suggests that. The accounts can very easily be structured such that investors are protected from individual company meltdowns like Enron. Bob,
Private retirement accounts in lieu of Social Security would never be invested entirely in Enron stock. When you have highly diversified mutual funds and your investments range not just among different companies but among different sectors, the rate of return is almost always better than the return from treasury bills.

People seem to think that private accounts means that people will be picking and choosing individual stocks on their own: no serious reform proposal suggests that. The accounts can very easily be structured such that investors are protected from individual company meltdowns like Enron.

]]> By: bob mcmanus http://willwilkinson.net/flybottle/2004/11/10/government-guarantees/#comment-1895 bob mcmanus Wed, 10 Nov 2004 11:43:00 +0000 http://www.willwilkinson.net/flybottle/?p=523#comment-1895 Odds of avoiding default and loss of your money are better on treasury bills, than say Enron Stock. That the question is even conceivable shows a quantitative difference that approaches qualitative. So if you will agree that your money is safer in T-Bills than your average hedge fund, you have to ask why is it safer? I might perhaps contend that if you don't agree, you are taking for granted institutions and mechanisms for securing your wealth (in gold or fine-art?) without acknowledging your dependence on them. If the gov't were to default on its unfunded liabilities, your money-market investment will be proportionately damaged. Odds of avoiding default and loss of your money are better on treasury bills, than say Enron Stock. That the question is even conceivable shows a quantitative difference that approaches qualitative.

So if you will agree that your money is safer in T-Bills than your average hedge fund, you have to ask why is it safer? I might perhaps contend that if you don’t agree, you are taking for granted institutions and mechanisms for securing your wealth (in gold or fine-art?) without acknowledging your dependence on them. If the gov’t were to default on its unfunded liabilities, your money-market investment will be proportionately damaged.

]]> By: KipEsquire http://willwilkinson.net/flybottle/2004/11/10/government-guarantees/#comment-1894 KipEsquire Wed, 10 Nov 2004 09:02:00 +0000 http://www.willwilkinson.net/flybottle/?p=523#comment-1894 You are entirely correct, the Supreme Court has made it crystal clear that there is no property interest in Social Security benefits (in Wall Street parlance, benefits never "vest"). See <a href="http://www.ssa.gov/history/nestor.html" rel="nofollow">Flemming v. Nestor, 363 U.S. 603 (1960)</a> or <a href="http://kipesquire.blogspot.com/2004/11/social-security-why-not-cut-current.html" rel="nofollow">my post</a> on the subject. You are entirely correct, the Supreme Court has made it crystal clear that there is no property interest in Social Security benefits (in Wall Street parlance, benefits never “vest”).

See Flemming v. Nestor, 363 U.S. 603 (1960) or my post on the subject.

]]> By: katzxy http://willwilkinson.net/flybottle/2004/11/10/government-guarantees/#comment-1893 katzxy Wed, 10 Nov 2004 02:40:00 +0000 http://www.willwilkinson.net/flybottle/?p=523#comment-1893 At least someone understands the ultimate reason why we have the 2nd amendment! P.S. Congrats on the Cato job. At least someone understands the ultimate reason why we have the 2nd amendment!

P.S. Congrats on the Cato job.

]]> By: katzxy http://willwilkinson.net/flybottle/2004/11/10/government-guarantees/#comment-1889 katzxy Wed, 30 Nov -0001 00:00:00 +0000 http://www.willwilkinson.net/flybottle/?p=523#comment-1889 At least someone understands the ultimate reason why we have the 2nd amendment! P.S. Congrats on the Cato job. At least someone understands the ultimate reason why we have the 2nd amendment!

P.S. Congrats on the Cato job.

]]> By: KipEsquire http://willwilkinson.net/flybottle/2004/11/10/government-guarantees/#comment-1890 KipEsquire Wed, 30 Nov -0001 00:00:00 +0000 http://www.willwilkinson.net/flybottle/?p=523#comment-1890 You are entirely correct, the Supreme Court has made it crystal clear that there is no property interest in Social Security benefits (in Wall Street parlance, benefits never "vest"). See <a href="http://www.ssa.gov/history/nestor.html" rel="nofollow">Flemming v. Nestor, 363 U.S. 603 (1960)</a> or <a href="http://kipesquire.blogspot.com/2004/11/social-security-why-not-cut-current.html" rel="nofollow">my post</a> on the subject. You are entirely correct, the Supreme Court has made it crystal clear that there is no property interest in Social Security benefits (in Wall Street parlance, benefits never “vest”).

See Flemming v. Nestor, 363 U.S. 603 (1960) or my post on the subject.

]]> By: bob mcmanus http://willwilkinson.net/flybottle/2004/11/10/government-guarantees/#comment-1891 bob mcmanus Wed, 30 Nov -0001 00:00:00 +0000 http://www.willwilkinson.net/flybottle/?p=523#comment-1891 Odds of avoiding default and loss of your money are better on treasury bills, than say Enron Stock. That the question is even conceivable shows a quantitative difference that approaches qualitative. So if you will agree that your money is safer in T-Bills than your average hedge fund, you have to ask why is it safer? I might perhaps contend that if you don't agree, you are taking for granted institutions and mechanisms for securing your wealth (in gold or fine-art?) without acknowledging your dependence on them. If the gov't were to default on its unfunded liabilities, your money-market investment will be proportionately damaged. Odds of avoiding default and loss of your money are better on treasury bills, than say Enron Stock. That the question is even conceivable shows a quantitative difference that approaches qualitative.

So if you will agree that your money is safer in T-Bills than your average hedge fund, you have to ask why is it safer? I might perhaps contend that if you don’t agree, you are taking for granted institutions and mechanisms for securing your wealth (in gold or fine-art?) without acknowledging your dependence on them. If the gov’t were to default on its unfunded liabilities, your money-market investment will be proportionately damaged.

]]> By: Brooke http://willwilkinson.net/flybottle/2004/11/10/government-guarantees/#comment-1892 Brooke Wed, 30 Nov -0001 00:00:00 +0000 http://www.willwilkinson.net/flybottle/?p=523#comment-1892 Bob, Private retirement accounts in lieu of Social Security would never be invested entirely in Enron stock. When you have highly diversified mutual funds and your investments range not just among different companies but among different sectors, the rate of return is almost always better than the return from treasury bills. People seem to think that private accounts means that people will be picking and choosing individual stocks on their own: no serious reform proposal suggests that. The accounts can very easily be structured such that investors are protected from individual company meltdowns like Enron. Bob,
Private retirement accounts in lieu of Social Security would never be invested entirely in Enron stock. When you have highly diversified mutual funds and your investments range not just among different companies but among different sectors, the rate of return is almost always better than the return from treasury bills.

People seem to think that private accounts means that people will be picking and choosing individual stocks on their own: no serious reform proposal suggests that. The accounts can very easily be structured such that investors are protected from individual company meltdowns like Enron.

]]>