I understand, skin in the game. All I'm saying is that maybe it's a little restrictive, and perhaps not even working as intended.
It's pretty easy to cheat the system with a long only portfolio, if you're truly controlling the system: cause a deflation -> long treasures will be awesome (TMF just went +100% in the corona-crisis), cause inflation -> gold and maybe also stocks and real estate.
There's no single parameter that you can hook a leader to to assure progress. That's what voting is for. It is a very hard, very old, and probably impossible to solve problem: https://www.investopedia.com/terms/a/agencyproblem.asp
Things like this site from OP may work wonders. We need more disclosure and more pesky people prodding at leaders and executives, analyzing their every step. Journalism, serious journalism, even if done by non-professionals. Remember that since Markopolos & Madoff the SEC is giving substantial cash awards to whistleblowers (proportional to the penalty), which is fantastic. And they're paying out money all the time, so if you know of any fraud do yourself and the society some good: https://www.sec.gov/whistleblower
> It's pretty easy to cheat the system with a long only portfolio, if you're truly controlling the system: cause a deflation
Causing a deflation is very hard, unless possibly if you control the fed.
And that's for the government as a whole. I'd be very surprised if an individual senator can't affect that meaningfully.
Compare that to the current system where a senator hears about huge news that will move individual stock prices next week, and can easily make huge profits.
You agree with me that it's mostly about insider trading, not about skin in the game.
Deflation is not that hard, just dampen social security. Or stop half of military contracts and half of infrastructure spend. Or just go to the federal budget and do anything to reduce it by > 30%. You'll have a deflation (a recession) in a month, even before those changes actually go into effect.
The US federal budget is 21% of US GDP. Reduce it by 30%, that will cause a 7% drop in GDP and a deflationary recession. Reduce it by 50% and you have a 10% drop, very substantial. I really don't understand what's difficult about this.
You can also jack up taxes and start paying off govt debt instead of spending it on something new. Would have similar effects.
If you think I'm wrong please write why or post a link with some economic thought, would be curious to read.
The gist is that you will not be able to move the needle with any effectiveness. Reduce the federal budget by 30% by force of will, or what? This is "first, convert 1kg lead to 1kg gold" level thinking.
I agree. That's what I mean by "it seems to be more for you guys about insider trading than about skin in the game".
Edit: I think I understood it. You mean that broad, "macro-like" allocation would prohibit shenanigans with assets in narrower domains, like for example when a congressman successfully pushes a particular drugs-related law that has very big impact on a some particular pharma company. It is more realistic that they can change a single paragraph in some act than they can throw out 30% of the federal budget to "finally start paying back our enormous national debt".
It's pretty easy to cheat the system with a long only portfolio, if you're truly controlling the system: cause a deflation -> long treasures will be awesome (TMF just went +100% in the corona-crisis), cause inflation -> gold and maybe also stocks and real estate.
There's no single parameter that you can hook a leader to to assure progress. That's what voting is for. It is a very hard, very old, and probably impossible to solve problem: https://www.investopedia.com/terms/a/agencyproblem.asp
Things like this site from OP may work wonders. We need more disclosure and more pesky people prodding at leaders and executives, analyzing their every step. Journalism, serious journalism, even if done by non-professionals. Remember that since Markopolos & Madoff the SEC is giving substantial cash awards to whistleblowers (proportional to the penalty), which is fantastic. And they're paying out money all the time, so if you know of any fraud do yourself and the society some good: https://www.sec.gov/whistleblower