Saturday, February 26, 2011

FLG Is Confused

These morons are proposing a federally-backed, inflation-adjusted annuity.

Here’s how it would work. Initially, people who wanted to buy this insurance would enroll through one of the qualified retirement savings plans already offered to the public, like a 401(k) plan, and could choose this annuity option instead of, or in addition to, investments in stocks, bonds or mutual funds.

Look, FLG isn't all that smart, but their plan sounds like offering people the ability to, basically, put more money into Social Security. This is a good idea?

UPDATE: FLG actually thinks if you want to make Social Security entirely optional in this way -- that people could buy into it if they want, then this sort of does make sense. But given that we already have what is for all intents and purposes supposed to be a federally-backed, inflation-adjusted lifetime annuity, then what's the point?

2 comments:

Andrew Stevens said...

There would be much a tighter link between contributions in and benefits out under such a scheme than there is under current Social Security and, presumably, it wouldn't be so generous on average.

Withywindle said...

I have a Keynesian post percolating, now that I've finished the biography. I think I would say that the point is to defer spending via a form of induced spending, thus tamping down inflation. But I say this because I know nothing about economics; whaddaya think?

 
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