Wednesday, June 20, 2007

TSP and Social Security Privatization

Back in the day when reform of Social security was under discussion, Republicans were pushing the alternative of having people invest in securities. They preferred the idea of individually managed accounts, as opposed to having the government manage investments. Some Democrats (like me) were open to something like the Thrift Savings Plan--the Federal version of a 401 K for its employees as at least one element of a revised system. Republicans attacked the idea, arguing that a government managed plan would be pressured to reflect social objectives in its investments.

A test of that position is underway--some Dems have asked the TSP to divest of stocks of companies in the Sudan, of tobacco, etc. etc. So far the board has resisted the idea.
If we get a Democratic government in 2008, it will be interesting to see if they can continue to do so.

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