Wednesday, December 1, 2010

Erskine's PEU Report

It's easier to read the tea leaves, when one grows them. Erskine Bowles bragged of his need to make another fortune as Deficit Commission Co-chair. How do the Commission's recommendations set the stage for Bowles to gain? Take retirement:

Some mandatory programs, like federal civilian and military retirement systems, are similar to programs in the private sector. When appropriate, we should apply innovations and cost-saving techniques from the private sector.

This translates to changing formulas, which lower the retiree's proceeds. Might an innovation be higher return investments, like private equity underwriters (PEU's)

It should encourage Americans to build wealth through savings and investment that will generate a return sufficient to allay fears that retirees will outlive their savings, and should permit Americans to have the option to transmit the remainder of their accumulated savings to their heirs. Americans need a fiscally responsible personal retirement savings system that is advanced funded, supplements the pay-as-you-go Social Security system, and accumulates funds for investments in business and infrastructure to help sustain a healthy economic growth rate.

Erskine's Morgan Stanley and Carousel Capital stand ready to help on the retirement investment front. I'm sure there are profit opportunities in the myriad of reforms in the plan. I expect PEU Erskine to mine them.

Update 11-20-11:  Obama's Deficit Commission report went nowhere.  The Congressional Deficit Supercommission appears headed to the same fate.  End result:  PEUs, virtual nonprofit financial organizations, win.

Update 11-6-16:  Hillary Clinton seems ready to tackle Social Security reform and partial privatization.