The disinformation on the alleged free lunch from privatization continues. Donald Luskin is asking folks to read this piece by Amy Menefee. She tries to claim some sort of leftie bias in the media. She also stumbles when she talks economics:
In reality, the president’s plan for personal accounts would operate much like the Thrift Savings Plan (TSP), a voluntary retirement savings system established in 1986 and used by more than 3.4 million federal employees including Congress. Social Security typically returns just 2 percent or less on payroll taxes paid into the system. In contrast, the Thrift Savings Plan has paid returns averaging 7 to 8 percent over the last 10 years. While it offers more freedom than traditional Social Security through voluntary individual savings accounts, it is designed to minimize risk. “You can’t hurt yourself there if you try,” Donald Luskin said of the TSP. Luskin, chief investment officer for the economic research firm Trend Macro, has written about investing and writes about media coverage of economics for National Review. With the TSP, “the two biggest mistakes investors make are impossible,” Luskin said. He said investors hurt themselves when they fail to diversify their portfolios and when they choose funds with high fees that eat away at their gains. The individual accounts in the TSP are invested in diversified funds with low fees, and Bush’s plan is modeled on that idea … “What they don’t tell you is you can’t avoid that risk by pooling together and everybody paying for everybody else,” Luskin said. “The least risky thing is to go it alone.”
I know how to avoid risk – buy indexed government bonds. But their real return is less than 2%. Luskin wants us to believe one can get an 8% return risk-free?