I think private accounts for Social Security are bad. I just saw on the cover of USA Today today a poll asking what people think of Bush’s plan, with results broken out by age. The trend was that younger people like it and older people don’t.

My opinion? They’re going to give every taxpayer something like three options as to what to do with their Social Security money. Which people are best suited to take advantage of this option? People living in trailer parks? The inner city? Or people who already invest and know what the hell they’re doing, people with money to spare? The fact is, wealthier, knowledgable people are going to do better, on average, with this system than poorer, less-educated people. It will widen the gap between haves and have-nots.

And who really needs Social Security? People who are investing in the stock market? Or people who don’t know the difference between a stock and a bond? It’s the latter. And they are not the people who will see the benefit from this system. Therefore I think it’s a poor solution. In fact, I don’t think it’s a solution at all.

Also — I have strong concerns about what effect will occur on these three or so funds when one third or more of the entire US population invests in them. Will their prices plummet? Will the skyrocket? Let me tell you what I think. People want to diversify. It distributes risk. So if I put my Social Security money in fund A, I’m probably not going to put the rest of my money in it. Therefore, I may be more inclined to sell it if I already own it. I might sell it for a lower price, its value might fall. Then these three funds that the government just spent billions of dollars buying will lose a lot of value quickly.