PartA 2. TheNationalAssociationofSecuritiesDealersisinvestigatingwhethersomebrokerage

PartA 2. The National Association of Securities Dealers is investigating whether some brokerage

houses are inappropriately pushing individuals to borrow large sums on their houses

to invest in the stock market. Can we persuade the association to investigate would-be privatizers of Social Security? For it is now apparent that the Bush administration’s privatization proposal will amount to the same thing: borrow trillions, put the

money in the stock market and hope.

Privatization would begin by diverting payroll taxes, which pay for current Social

Security benefits, into personal investment accounts. The government would

have to borrow to make up the shortfall. This would sharply increase the government’s debt. “Never mind”, privatization advocates say, “in the long run, people would

make so much on personal accounts that the government could save money by cutting retirees’

benefits.Even so, if personal investment accounts were invested in Treasury bonds,

this whole process would accomplish precisely nothing. The interest workers would receive on,

their accounts would exactly match the interest the government would

have to pay on its additional debt. To compensate for the initial borrowing,

the government would have to cut future benefits so much that workers would gain nothing at all.

However, privatizersclaim that these investments would make a lot of

money and that, in effect, the government, not the workers, would reap most of those gains,

because as personal accounts grew, the government could cut benefits.

We can argue at length about whether the high stock returns such schemes assume are realistic

(they arent), but lets cut to the chase: in essence, such schemes

involve having the government borrow heavily and put the money in the stock market. That’s because the government would, in effect, confiscate workers’gains in their personal accounts by cutting those workers’ benefits.

Once you realize whatprivatization really means, it doesn’t sound too responsible, does it? But the details make it considerably worse. First,

financial markets would, correctly, treat the reality of huge deficits today as a much more

important indicator of the governments fiscal health than the mere promise that government could save money by

cutting benefits in the distant future. After all, a government bond is a legally binding

promise to pay, while a benefits formula that supposedly cuts costs 40 years from now is nothing

more than a suggestion to future Congresses.

If a privatization plan passed in 2005 called for steep benefit cuts in 2045,

what are the odds that those cuts would really happen? Second,

a system of personal accounts would pay huge brokerage fees. Of course, from Wall Street’s point of view that’s a benefit, not a cost.

第26题：According to the author, “privatizers”are those_____.

[A] borrowing from banks to invest in the stock market [B] who invest in Treasury bonds

[C] advocating the government to borrow money from citizens [D] who earn large sums of money in personal

accounts