can SS be saved by buying stocks?

[Max Sawicky]

As I recall the argument, Greenstein just said the Trustees were 
right - dismal productivity growth plus dismal labor force growth 
equals dismal GDP growth. But it's a known fact (as my mother says 
when she can't produce a source) that typically labor force and 
productivity growth figures move in opposite directions.

Someone - Max? - could speak to Greenstein's motives, but my 
suspicion is that he's trying to curry favor with the administration. 
But I'm a hopeless cynic.
>>

G-stein buys into the mainstream neo-classical nostrum
that national saving is the basis for economic growth.
The Social Security reform proposed by G-stein, Clinton,
and others is a total fraud; it's aimed at raising saving
and capital formation.  That's the way they "fix" Social
Security.

It is also a fraud because given prospective budget
surpluses, the Federal government will have no cash
shortfall for 50 years.  All present benefits under
Soc Sec and Medicare etc. could be paid, the surplus
run, the debt eliminated.

The logic of the policy is that when government borrows
less or saves more, interest rates go down, and business
firms borrow more for business investment in plant
and equipment. This causes the economy to grow and
creates ever more, higher-paying jobs.  Oddly enough,
the budget projections show that, over the period
in which the Federal debt is almost eliminated,
interest rates do not change.

The Social Security actuaries take no account of
such policies in their projections.  So we could
have an agreement tomorrow, signed in blood, for
the Feds to run surpluses until they amassed
a hoard of assets equal to the GDP, and the
projections would be unchanged and we would
still have the "crisis."  By contrast, if
Clinton signed a bill tomorrow crediting the
Trust Fund with a gazillion dollars, the crisis
would be eliminated by the Trustees' methodology.

Ain't nothin funnier than economic policy.

mbs