] "There will be some upfront transition financing that
] will be needed to move toward a better system that will
] allow younger workers to invest a small portion of their
] own money into personal savings accounts," White House
] spokesman Scott McClellan said.
]
]
] Asked if transition costs, estimated at between $1
] trillion to $2 trillion, would be financed by government
] borrowing, he added: "That's what you're looking at doing
] as part of the transition to a better Social Security
] system."

Part of this is just me, but another part is me screaming "NO!" The current state of affairs is, the government has been living well beyond anything close to its means since the "Reagan Revolution" with the exception of Clinton's second term. Part of the problem here is the same as the problems people have with 401k's where what you have in has little or no bearing what comes out, especially if there is a market collapse.

In the late 70's/early 80's, the normal place for the Dow to hover was in the 700-1000 range. On Black Monday 1987, the Dow dropped 22.6% from around 22-2300 to 1700-1800 with a 508 point decline (yes, that took some looking for those rough numbers, but it's accurate enough). Black Monday 1929 the Dow dropped 24%, from about 300 to about 225 and bottomed out just over 40 in 1932. The Dow didn't get back to pre crash levels until 1954!

What that all means is, the market (the same place that they're planning to stick those dollars) is a volatile place. Between 1980 and 1998 or so, it was a great place for money, moving up roughly 1500%. This is why Warren Buffet is one of the richest people on the planet. But, it is also a place where incredible amouts of money can be lost.

Now stacking on top of all the other problems that already exist, these guys want to borrow another 1-2 TRILLION on top of that? Once upon a time, the Republican party billed itself as the party of fiscal responsibility. I'm sorry, but this doesn't look even remotely responsible either to the people putting their money into the system or as a general move by a government already wallowing in a sea of red ink.

Is this something that might have potential? Sure, if you were running a government that were financially sound, the government could go ahead and do something along these lines and at the same time ensure a minimum return (which is what Social Security was created for in the first place!). But that is not what we have. What we have is 7.5 TRILLION dollars in debt that is moving up at a clip of about another 12 BILLION a week. Interest on that debt accounts for about 1 of every 6 dollars in the budget.

This isn't an investment opportunity, it's a recipe for a return to 1929.

W.House: Borrowing to Help Fund Social Security Plan