Social Security "Reform"? He called it a fix?

The recent news subjects include the word "social security" on a daily basis. It's incredible. The problem is that babyboomers will start to retire and start to draw more money out of the SS system than younger people will chip in, and it needs to be "fixed". President Bush say that we should privatize social security -- I say "Great!!!" President Bush say we will fund this by taking the money young people chipping in to the system, and invest them into the stock market -- I say "what was the problem again???"

Instead of fixing the worry we talk about now, Mr. President seems to have came up with a "fix social security" plan that reduce further liability of the government to future retiring people, and unload the responsibility into the "market" and people themselves. I have no problem with that. Now, is Mr. President fixing anything else?

He says the plan may model after the Thrift Savings Plan (www.tsp.gov), the retirement plans for federal employees. Out of the five funds in it, one is a Treasury bond fund, the G fund -- that's pretty much what the SS system does now with the surplus. But every time they talk about the SS "reform", stock market (the C or S fund in TSP) was always implied, if not out-loud. Why? What else can Mr. President propose to fix without telling us? Stock Market?

In my understanding of retirement plans, people put a lot of money into the stock market in one way or another: 401k, pension (probably indirectly thru the companies), and TSP -- that's a lot of retirement money flowing into the stock market these days. When the babyboomers retire, I would have to guess that a lot of money would stop flowing in, and more money has to start flowing out of the stock market to fund their retirement or to be placed in some safer securities like bond. If no one else chip in the money to buy the stock, the values would fall until it's low enough to attract someone to buy. With so many babyboomers, I would bet that they will win -- stock market value has to stagnate, or come down slowly for years when they retires, if it doesn't trigger a big sell-off.

It seems that Mr. President is coming to the rescue and trying to get younger people into the stock market, therefore increasing or stabilizing stock values, or bailing out the guys in it now (big investor and to-be retiree alike). Sadly, this reminds me of the "Base" for Mr. President.

Interestingly, it may also fix the problem of low American saving rate, which lead to low domestic investment rate, which lead to U.S. companies relying on foreign capital -- which, I think, may flow out of U.S. when foreign babyboomer retires also.

I don't like this babyboomer situation, and I don't like the feeling that Mr. President seems to be doing so much without telling us. Now, am I supposed to thank for Mr. President is possibly trying to fix the world? Or am I supposed to scream bloody murder because he is probably trying to suck us, the young people, into cushioning the likely down fall of the stock market when babyboomer retires?

Wait!!!! Maybe Mr. President is trying to save us young people, too!!!! Looks like his strategy is to finance it with bonds again, like what the government started decades ago, when and before we were kids. This will push the load to ours kids, like what their generation did to their kids (wait, was that us?)

I love America.