"Clinton Leads Toward a Plan to Invest Some Soc. Sec. Taxesin Market"

Nathan Newman nathan.newman at yale.edu
Fri Dec 11 16:40:12 PST 1998


-----Original Message----- From: Doug Henwood <dhenwood at panix.com> To: lbo-talk at lists.panix.com <lbo-talk at lists.panix.com>


>One other kicker to this debate that few mention is that Social Security
>invested funds, unlike normal investments, should not follow traditional
>fiduciary rules of looking for the highest return. Given the choice
>between capital-heavy, low-wage industries and labor-heavy, high-wage
>industries, Social Security funds should be invested in the later for the
>simple fact that promoting the later itself increases the FICA taxes paid
>back into the system.

-Aren't most capital-heavy industries high wage and labor-heavy ones low -wage?

In general, although I was talking about tendencies and priorities for investment on an x-y graph (if we are going to be particular). Auto plants in Mexico are high capital, low-wage and there are of course many high skill service industries with low capital costs.

The point is that the highest returns for a government, wage-tax funded system are not the same as for an individual investor.

--Nathan



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