Newsgroup: it.economia.borsa
Titolo: Discorso di oggi di Greenspan davanti la House Commerce Subcommittee of Finance

Scusate la lunghezza del post, ma il vecchio Alan e' piu' prolisso di
moi.
Scusate se non traduco, ma sono troppo stanco.
Gigi
FEDERAL RESERVE CHAIRMAN ALAN GREENSPAN
MARCH 3, 1999
Mr. Chairman and other members of the committee, preparing for the
retirement of the baby boom generation looms as one of our nation's
most difficult challenges, and I commend the serious efforts being
made here to address this important long-term problem. Before
discussing my views on the issue of investing the social security
trust fund in equities, I would like to examine the more fundamental
issues that any retirement reform will have to address. The dramatic
increase in the ratio of retirees to workers that seems inevitable, as
the baby boom generation moves to retirement and enjoys ever greater
longevity, makes our current pay-as-you-go social security system
unsustainable. Furthermore, the broad support for social security
appears destined to fade as the implications of its current form of
financing become increasingly apparent. To date, with the ratio of
retirees to workers having been relatively low, workers have not
considered it a burden to share the goods and services they produce
with retirees. The rising birth rate after World War II, which, in due
course, contained the growth of the ratio of retirees to workers,
helped make the social security program exceptionally popular, even
among those paying the taxes to support it. 
Indeed, workers perceived it to be a good investment for their own
retirement. For those born before World War II, the annuity value of
benefits on retirement far exceeded the cumulative sum at the time of
retirement of contributions by the worker and his or her employer,
plus interest. For example, the implicit real rate of return on social
security contributions was almost 10 percent for those born in 1905,
and was about 6 percent for those born in 1920. The real interest rate
on U.S. Treasury securities, by comparison, has generally been below 3
percent. But, births flattened after the baby boom, and life
expectancy beyond age sixty-five continued to rise. Consequently, the
ratio of the number of workers contributing to social security to the
number of beneficiaries has declined to the point that maintaining the
annuity value of benefits on retirement at a level well in excess of
accumulated contributions has become increasingly unlikely. Those born
in 1960, for example, are currently calculated to receive a real rate
of return, on average, of less than 2 percent on their cumulative
contributions. Indeed, even these low rates of return for more recent
cohorts likely are being overestimated, because they are based on
current law taxes and benefits. In all likelihood, short of a
substantial infusion of general revenues, social security taxes will
have to be raised, or benefits cut, given that the system as a whole
is still significantly underfunded, at least according to the
intermediate projections of the Old-Age and Survivors Insurance (OASI)
actuaries. For the present value of current law benefits over the next
75 years to be fully funded through contributions, social security
taxes would have to be raised about 2.2 percent of taxable payroll; to
be fully funded in perpetuity, that is, to ensure that taxes and
interest income will always be sufficient to pay benefits, social
security taxes would have to be raised much more--perhaps something on
the order of 4 to 5 percent of taxable payroll. This issue of funding
underscores the critical elements in the forthcoming debate on social
security reform, because it focuses on the core of any retirement
system, private or public. Simply put, enough resources must be set
aside over a lifetime of work to fund retirement consumption. At the
most rudimentary level, one could envision households saving by
actually storing goods purchased during their working years for
consumption during retirement. Even better, the resources that would
have otherwise gone into the stored goods could be diverted to the
production of new capital assets, which would, cumulatively, over a
working lifetime, produce an even greater quantity of goods and
services to be consumed in retirement. 
The only way we will be able to finance retirement incomes that keep
pace with workers' incomes is to substantially increase the national
saving rate, increase the borrowing of foreign capital, or increase
the output that a given capital stock, financed through this saving,
can produce. The crucial retirement funding issues center on how to
increase our national saving and how to allocate physical resources
between workers and retirees in the future. We must endeavor to
increase the real resources available to retirees without blunting the
growth in living standards among our working population. 
In this light, increasing our national saving is essential to any
social security reform. Privatization proposals that begin to address
social security's existing unfunded liability would significantly
enhance domestic savings; so would fuller funding of the current
social security program. But the size of the unified budget surplus
implied by such funding, many have argued, would be politically
unsustainable. The President, recognizing this political risk, has
proposed changing the budgetary framework so as to support a large
unified budget surplus. This is a major step in the right direction
that, if effective, would ensure that the current rise in government's
positive contribution to national saving is sustained. The large
surpluses projected over the next 15 years, if they actually
materialize, would significantly reduce the fiscal pressures created
by our changing demographics. Whichever direction the Congress chooses
to go, whether toward privatization or fuller funding of social
security, augmenting our national saving rate has to be the main
objective. 
The Administration has also proposed investing a portion of the social
security trust fund assets in equities, rather than in U.S. Treasuries
alone. Having the trust fund invest in private securities most likely
would increase its rate of return, although the increase might be less
than historical rates of return would suggest, and certainly would be
less on a properly risk-adjusted basis. But where would that higher
return come from, and what would happen to private funds available for
consumption in retirement? 
If social security trust funds are shifted from U.S. Treasury
securities to private debt and equity instruments, holders of those
securities in the private sector must be induced to exchange them, on
net, for U.S. Treasuries. Private pension and insurance funds, among
other holders of equities, presumably would swap equities for
Treasuries. It seems likely that a rise in the interest rate paid on
Treasuries, and perhaps an increase in equity prices and a reduction
in the expected future return on equity, would be necessary in order
to induce private investors to reallocate their portfolios from
equities to U.S. Treasury securities. If this is indeed the case, then
the net increment to the government of investing the trust fund in
equities on an ongoing basis presumably would be less than the
historical rates of return suggest. That said, exactly what changes in
bond and stock prices would result from this type of large-scale swap
of U.S. Treasuries for equities is extremely difficult to predict. 
But analyzing the macroeconomic effects of the portfolio reallocation
is much less complicated. The transfer of social security assets from
U.S. Treasuries to equities would not, in itself, have any effect on
national saving. Thus, the underlying economic assets in the economy
would be unchanged, as would the total income generated by those
assets. Any increase in returns realized by social security must be
offset by a reduction in returns earned on private portfolios, which
represent, to a large extent, funds held for retirement. Investing
social security assets in equities is, then, largely a zero-sum game.
To a first approximation, aggregate retirement resources--from both
social security and private funds--do not change. 
Only an increase in national saving or an increase in the efficiency
with which we use our saving can help us meet the retirement
requirements of the coming years. Indeed, improved productivity of
capital probably explains much of why the American economy has done so
well in recent years despite our comparatively low national saving
rate. For productivity and standards of living to grow, financial
capital raised in markets or generated from internal cash flow from
existing plant and equipment must be continuously directed by firms to
its most profitable uses--namely new physical capital facilities
perceived as the most efficient in serving consumers' multiple
preferences. It is this continuous churning, this so-called creative
destruction, that has become so essential to the effective deployment
of advanced technologies by this country over recent decades. 
Looking forward, the effective application of our capital to its most
highly valued use is going to become, if anything, more important, as
we strive to increase the resources available to provide for the
retirement of the baby boomers without, in the future, significantly
reducing the consumption of workers. An efficient market pricing
mechanism for equities has been a key element in our superior
allocation of saving into investment this past decade. Large
investments in equities by the social security trust funds could
impair that process. 
As I have indicated in earlier testimony, I doubt that it is possible
to secure and sustain institutional arrangements that would insulate,
over the long run, the trust funds from political pressures. These
pressures, whether direct or indirect, could result in suboptimal
performance by our capital markets, diminished economic efficiency,
and lower overall standards of living than would be achieved
otherwise. 
The experience of public pension funds seems to bear this out.
Although relevant comparisons to private plans are difficult to
construct, there is evidence that the average rate of return on state
and local pension funds tends to be lower than the return realized on
comparable private pension funds, other pooled investments, and market
indexes. Of course, a significant part of this disparity would be
eliminated were these returns adjusted for risk, because public
pension plans are often invested more conservatively than private
plans. But there is evidence that returns are lower even after
accounting for differences in the portfolio allocation between stocks
and bonds. For example, it has been shown that state pension plans
that are required to direct a portion of their investments in-state
and those that make "economically targeted investments" experience
lower returns as a result. Similarly, there is evidence suggesting
that, the greater the proportion of trustees who are political
appointees, the lower the rate of return. A lower risk-adjusted rate
of return on financial assets is almost invariably an indication of
lower rates of return on the real underlying assets on which they are
a claim. 
As I have also indicated in previous testimony, I do not deny that the
federal government can manage equities without political interference
if they are held in defined contribution funds or small defined
benefit plans, such as the one run by the Federal Reserve. Defined
contribution funds, such as the federal government's Thrift Savings
Plan, are effectively self-policed by individual contributors, who
would surely object were their retirement assets to be diverted to
investments that offered less than market returns. 
But government defined benefit plans, like social security, provide
guaranteed annuities that are wholly insulated from poor investment
performance. Annuitants look to the federal government for their
retirement incomes, not the performance of any trust funds. Thus,
beneficiaries have no incentive to monitor the performance of their
investments. And, while the government's small defined benefit funds
do not reach the asset size threshold to make them a target, a
multi-trillion dollar social security trust fund presumably would. 
It is possible that institutions could be created that would prevent
the trust fund investments from being subject to political
interference. But, investing the social security trust funds in
equities does little or nothing to improve the overall ability of the
U.S. economy to meet the retirement needs of the next century. Given
this lack of evident benefit, it is unclear to me why we should take
on the risk of interference, which, probably short of a Constitutional
amendment, cannot be eliminated. Even if concerns about politically
driven investment were not to materialize, what would have been gained
by such a huge shuffling of funds? 
To the extent that a transfer of private retirement resources to
social security is deemed necessary to fund currently promised
benefits, why not do it directly through increased social security
taxes, or an allocation of general revenues to the social security
trust fund? Whatever the Congress does, it would be best not to
obscure the choice of real resource allocation with complex financial
structures that merely reshuffle claims to real resources, without
increasing them. 
A collateral issue is relevant to this debate. If the Congress were to
decide to do nothing to alter the path of receipts and outlays
projected under current law, a large buildup in the social security
trust fund would occur, along with a significant on-budget surplus,
according to the projections of CBO and OMB. The consequence would, of
course, be a significant decline in the current $3-3/4 trillion
outstanding federal debt to the public. 
But, if the unified budget is in surplus for a protracted period of
years, it is at least conceivable that the outstanding public debt
would be eliminated. I might add that this would be the first such
occurrence for this nation, the previous low having been $38 thousand
in 1835 and 1836. 
Currently, the rise in the holdings of U.S. Treasuries by the social
security trust fund is accomplished by the Treasury redeeming or
buying back debt from the public, and selling it as special series
nonmarketables to the trust fund. But, should the debt to the public
fall to zero, there would be no additional Treasury instruments
available to the trust fund from that source. Were the Treasury,
nonetheless, to continue to sell debt to the trust funds, its cash
balances at the Federal Reserve would build up. At that point, under
existing policy, there would be no choice but to have the social
security trust fund invest in private or quasi-private agency
securities. I grant that, should these circumstances arise, the
decision of how to handle social security investments would become a
more pressing question. However, it is exceptionally difficult for me
to focus seriously on so politically improbable, though so intriguing,
an event. 
Of course, assessing the fiscal, financial, and economic state of the
American economy in the early twenty-first century is an enormously
difficult undertaking. We cannot confidently project large surpluses
in our unified budget over the next fifteen years, given the inherent
uncertainties of budget forecasting. How can we ignore the fact that
virtually all forecasts of the budget balance have been wide of the
mark in recent years? For example, as recently as February 1997, OMB
projected a deficit for fiscal year 1998 of $121 billion--a $191
billion error. The CBO and others made similar errors. Likewise, in
1983, we confidently projected a solvent social security trust fund
through 2057. Our latest estimate, with only a few changes in the
program, is 2032. 
It is possible, as some maintain, that the OASI actuaries are too
conservative, and that productivity growth could be far greater than
is anticipated in their "intermediate" estimate. If that is, in fact,
our prospect, the social security system is in less jeopardy than it
currently appears. But proper fiscal planning requires that
consequences of mistakes in all directions be evaluated. If we move
now to shore up the social security program, or replace it, in part or
in whole, with a private system, and subsequently find that we had
been too pessimistic in our projections, the costs to our society
would be few. If we assume more optimistic scenarios and they prove
wrong, the imbalances could become overwhelming, and finding a
solution would be even more divisive than today's problem. 

Gigi, giacchč hai fatto nove, con uno sforzo cerca di fare dieci e non se ne
parla piů. So che č difficile e pericoloso, ma almeno potevi darci una
semplice impressione sui tratti salienti dell'intervento. Se non te la
senti... fa niente. Grazie lo stesso.
Chi se la sente????
Ciao. Bony.

Chi se la sente????
Anche se ora e' tardi, la notizia non e' piu' fresca, provero' a
rispondere lo stesso, anche perche' il Sole da' un resoconto molto
breve ed alquanto tendenzioso.
Certo e' che e', appunto, ben difficile riassumere questo intervento
che e' nel piu' classico stile convoluto, ultratecnico e sibillino del
nostro amico Alan.
Comunque:
- All'inizio si lancia nella solita dissertazione (tutto il mondo e'
paese) della onerosita' dei fondi pensione statali (basati sui
treasuries a differenza di quelli privati n.d.G), per via dei soliti
fatti: invecchiamento della popolazione dopo il baby-boom, etc., tutti
argomenti a noi comuni.
In particolare cita che il ritorno medio reale delle pensioni
pubbliche  e' stato del 10%, poi via via calato al 6% a fronte di un
rendimento reale dei bond del 3% max, quindi questo comporta un costo
attivo.
Tralascio altre cose; Greenspan entra solo in larvata polemica, molto
indiretta, con la idea manifestata qualche settimana fa da Clinton di
investire in azioni direttamente i fondi statali. Non dice apertamente
che cio' porterebbe ad ulteriore sopravvalutazione dei corsi, in
effetti qui non nomina mai la bolla - a differenza del post successivo
di ieri sera che pero' evidentemente non si riferiva al discorso
ufficiale.
 Dice solo che questo potrebbe mettere in crisi un sistema
finanaziario evoluto  dove il 'return on equity' e' accuratamente
calcolato, ma soprattutto (banale ma vero) dice 
che, se i fondi statali comprano azioni, devono per forza disinvestire
in titoli di stato, i rendimenti aumenterebbero, quindi i fondi
privati dovrebbero viceversa modificare il loro asset,
 cioe' insiste giustamente sul concetto che il denaro non si crea.. e
quindi l'operazione risulterebbe con beneficio totale 0 per il
pensionato che attingera' dai fondi privati e pubblici.
Il rischio intrinseco dell'investimento azionario, inoltre, non
compenserebbe il beneficio, e, da ultimo, sarebbe ben difficile
impedire un utilizzo 'politico' del denaro pubblico (e se lo dice un
americano possiamo crederci).
L'unica terapia, semplifico molto, sarebbe allora quella di aumentare
il risparmio accantonando piu' soldi, pur riconoscendo lui  (qui
veramento taglio con l'accetta) che la forte spesa in consumi, e il
riinvestimento in capitale di rischio, ha fortemente spinto la
economia americana.
Nell'ultima parte del discorso (che un politologo potrebbe forse
ritenere la piu' interessante) infine si lancia nell'argomento piu'
spinoso (beati loro, neh?) dell'utilizzo del surplus di bilancio
federale, anche qui -sappiamo gia' noi-  in contrasto con Clinton. Lo
fa pero' in un modo circonvoluto e proiettivo, dicendo che:
-il surplus puo' essere impiegato o a ridurre lo stock del debito,
finanziando il fondo pensione pubblico con nuove tasse, oppure puo'
essere impiegato in parte  per rimpinguare direttamente le casse
pensioni : naturalmente lui non suggerisce niente, essendo
questa una stretta competenza del Congresso; aggiunge
pero' che, rimanendo cosi' come stanno le leggi:
-pur essendo  impossibile fare predizioni sui dati macro, e tanto piu'
sul bilancio corrente, essendo queste sempre grossolanamente errate
(e qui, nota personale, non posso non pensare al nostro patetico piano
di programmazione economica coi suoi numerini belli tutti scritti
sulla carta)
Stante appunto la impossibilita' di predire il futuro,  già adesso il
debito pubblico si va riducendo, ed il tesoro immette in circolazione
tagli speciali non commerciabili per i fondi pensione dato che il
ritmo di rinnovo dei bond e' negativo;
- e che, se le cose andassero sempre cosi' bene, addirittura il debito
pubblico usa sparirebbe - cita due date : 2057, precedente proiezione,
e 2032, col ritmo attuale -
 e cosi' in effetti i fondi pensione non potrebbero proprio piu'
utilizzare i bond, ed allora il problema di utilizzare altri tipi di
investimento si  porrebbe necessariamente, ma il discorso e' solo
futuribile.
Mio ultimo riassunto: si direbbe  (w la nostra sibilla), che Greenspan
sia a favore del versamento di parte del bilancio nei fondi pensione
sempre in forma di titoli di stato, finanziando cioe' il risparmio
'obbligatorio' soltanto tramite un attento controllo della economia in
modo da favorire prolungate condizioni di surplus. Il rischio maggiore
per le pensioni statali risulta essere alla fine,  la scomparsa del
debito pubblico.
Visto che razza di problemi hanno? Proprio come noi, vero?
Gigi

Grazie Gigi sei stato prezioso e chiaro. Hai un futuro come traduttore
d'alto livello. La pericolosità? Intendevo quella che corrono chi deve
entrare nei sottili ragionamenti economici dove i sottintesi la fanno da
padrone ed è difficile cogliere il bersaglio che l'attore vuole raggiungere.
Perciò molte volte, chi traduce si mette sulla difensiva quando vi sono
risvolti economici che potrebbero essere generati dalla traduzione stessa.
Ciao. Bony.