That Would Have Worked Out Well
Anyone seen any recent calls for Social Security private accounts?
The stock market crash has shown how catastrophic private accounts would have been, and who would have really benefited from them. Would the government have allowed the Bear Stearns and Lehman outcomes had the Social Security system been chock full of those stocks? Remember, both were former blue chips, the sort of companies that proponents of private accounts insisted any new system would be limited to. The same for Citi, AIG, Fannie Mae, and others. How much pressure would the Fed and Treasury have felt -- and what more would have been done -- to keep those afloat and/or out of penny stock land?
That pressure would have been exerted by millions of unpaid but highly effective lobbyists: people emailing and calling Washington, demanding that their Social Security money -- and so the stocks, the companies, and the executives -- be saved. Corporate bondholders would have loved it, since the Social Security system effectively would have become a massive safety buffer. Would "nationalization" even be considered if it meant destroying part of Social Security?
Private accounts are dead now, so it's a bit of a moot point. But I wonder how many of those who both supported them and genuinely object to the prevailing bailout ethos ever thought this through.
The stock market crash has shown how catastrophic private accounts would have been, and who would have really benefited from them. Would the government have allowed the Bear Stearns and Lehman outcomes had the Social Security system been chock full of those stocks? Remember, both were former blue chips, the sort of companies that proponents of private accounts insisted any new system would be limited to. The same for Citi, AIG, Fannie Mae, and others. How much pressure would the Fed and Treasury have felt -- and what more would have been done -- to keep those afloat and/or out of penny stock land?
That pressure would have been exerted by millions of unpaid but highly effective lobbyists: people emailing and calling Washington, demanding that their Social Security money -- and so the stocks, the companies, and the executives -- be saved. Corporate bondholders would have loved it, since the Social Security system effectively would have become a massive safety buffer. Would "nationalization" even be considered if it meant destroying part of Social Security?
Private accounts are dead now, so it's a bit of a moot point. But I wonder how many of those who both supported them and genuinely object to the prevailing bailout ethos ever thought this through.
posted by The Cunning Realist at Monday, March 09, 2009
58 Comments:
Heh, a few years ago I had discussions with a relative who is a financial analyst. He's the kind of guy who still thinks the world works the way he was taught in school. He thought that private accounts were a great idea. I argued that they were unnecessary and a bad idea.
As with a number of things, recent events have brought him around to my view!
Surprisingly naive. 401(k)'s lost an estiomated 40% last year, 1 trillion down. Pension funds lost an estimated 40%, about 900 million down. You seriously think that, given that "Da People" took these losses with nary a complaint, that loosing Social Security benefits dismissed out of hand by trustee reports, pronounced paper IOU's by now belatedly former presidents, and considered "entitlement" to be reformed by the current Establishment Creature in the Oral Office would have triggered more of a response? Or even so - more *effective* a response?
This country is being looted on a scale that simply defies belief, by a bunch of revolving door statist snake oil sellers seamlessly threaded from Wall Street to Congress to the White House, and the comparative silence is deafening. You try to do democracy with the people you have, not the people you wish for.
There's been a revolution around these parts? Hard to believe.
I have to correct myself:
"Between October 9, 2007, and October 9, 2008, equity assets in retirement plans dropped by about $4 trillion in value, according to the CRR study. State and local government defined benefit plans dropped by about $1 trillion, private employer defined benefit plans dropped by about $900 billion, private employer defined contribution plans dropped about $1.1 trillion, Individual Retirement Accounts dropped about $800 billion, and federal government thrift plans dropped about $100 billion."
My number was government pensions only - but you could make the case that these are somehow "closer" to Social Security then 401(k) and other retirement vehicles.
The one detail to observe is that these losses do not yet add up to the total lost by the financial industry. Hence it is safe to assume that more retirement money will have to be lost - hence the pressing, compulsive need of the Obama administration to but Social Security benefits on the table while a shock-and-awed public is considered pliable to swallow some more "sacrifice" pragmat-ism.
In a somewhat related story, "pre-paid" college tuition programs are struggling.
http://www.montgomeryadvertiser.com/article/20090307/NEWS02/903070320
The Legislature created the Wallace-Folsom Prepaid Affordable College Tuition Plan in 1989. Parents pay a fixed amount when a child is young in anticipation of getting the tuition and mandatory fees paid at an in-state public university when the child finishes high school. To get the money, the program invests most of it in the stock market.
Ivey said that strategy worked well until the stock market plunged, tuition rose faster than anticipated, and college enrollment by participants peaked.
The program's assets have dropped from $899 million in September 2007 to $463 million at the end of January -- a 48-percent decline. Its assets equal about half of its anticipated liabilities, said Mike Mancuso, attorney for the state treasurer's office.
"Is there enough money to pay all the obligations? No," Ivey said at the news conference.
This is pretty much what would eventually happen with privatized Social Security.
In my lay opinion, the desire to privatize SS had nothing to do with ideology or expectation of increased return, but was a move to replenish the base of the pyramid and further prop up Wall St. to keep this crash from happening...how else to create more demand when seemingly everybody who was capable of it had already bought in?
I'm with the last anonymous, I always suspected that besides the general republican hatred of Social Security what was driving the push for private accounts was the need to prop up the markets with another bubble
The Boomers retiring and cashing out of their 401ks was going to leave a hole. Fill the hole with SSI monies. Everyone on Wall street wins.
Of all the stupid ideas, this was the most stupid.
Social Security doesn't make anybody rich. It provides a minimum safety net. It can never be put at risk. If the trust needs to be funded, then that's what needs to be done, without gimmicks.
Another vote for what Anonymous @ 3/09/2009 2:16 PM said, and the two comments that followed. I was dead certain that was a major component in the push.
You can pretty much guarantee that all those politicians who spoke in favor of this will never be asked if they still support it by the political media.
Its gone down the memory hole. In a short time almost everything that happened in the Bush era will go there too
What was so sad about that drive to "privatize" SS was that the potential problems were so damn obvious that even I, with my minimal knowledge of markets, could see the handwriting on the wall. The cons were so damn obvious that the drive failed because people with less knowledge than me! saw the awesome level of stupid.
Chalk me up as yet another vote for the "subsidizing Wall Street was the entire point" theory. I suspected that the second they revealed that the accounts weren't truly "private" (read: you couldn't just keep the money set aside if you wanted).
It appears no one has any faith left based on these comments.
Too much "faith" is one of the (many) things that caused the problem in the first place. Honest evidence - of creditworthiness, of the fact that people were or were not actually doing the jobs they were supposed to be doing, of risk - would have served us a lot better than "faith" in the markets.
"Anyone seen any recent calls for Social Security private accounts?"
Sure, I'll bite. Stocks have lost 40% of their value. That's close to the amount Social Security will have to be cut to balance its books. And for current payees into SS, they will get a negative rate of return.
If you were near retirement, your portfolio would have shifted heavily to bonds and you would have been far less subject to the oscillations of the market. Young people investing now are going to benefit a lot from the down market.
I do agree that SS shouldn't be a retirement plan but more of a welfare program for poor seniors. But the smug "see I told ya so" comments are just ignorant about the fiscal reality of Social Security.
If you're worried about whether you'll get your money from Social Security, I'm sure AIG will sell you a CDS to cover the risk.
ANY plan that relies on a constantly rising stock market is foolish in the extreme. Stocks rise and fall. Long term, then always rise, but what happens when they fall at a time when funds are needed most?
"If you were near retirement, your portfolio would have shifted heavily to bonds and you would have been far less subject to the oscillations of the market."
Well, maybe the portfolio would have shifted. Or maybe Wall Street would make sure loopholes were created such that they could manage portfolios for their own short-term interest, rather than serving the long-term interest of the account owners.
I guess I'm the only one that that:
a) Assumes that drops of the current magnitude occur occasionally in the stock market. (I would guess that an average 20 year old that lives a normal life span will see two 50% stock market drops and probably one 90% drop)
and
b) Still would rather have their SS money going to a private account rather than disappearing down a government hole.
"You can pretty much guarantee that all those politicians who spoke in favor of this will never be asked if they still support it by the political media."
It'll be back as soon as Republicans retake the White House or Congress. You can depend on that.
Just like deregulatory or "nonregulatory" banking crises happen like clockwork under Republican administrations.
"Private accounts are dead now"
Have you personally witnessed them buried under a crossroads with a stake through their heart? If not, don't be so sure ... check back within five years, someone will be pushing the idea along with the notion of a Social Security crisis.
You don't even need to wait for a Republican President. Yesterday on "Morning Joe" on MSNBC I saw a reprublican congressman touting his plan for economic recovery which included partial privatization of Social Security...
So what? Correct me if I am wrong........but last time I checked, the Dow still has half of its value that it had when Bush proposed his VOLUNTARY 2% "private accounts" solution. Conversely, the Gov't-run Social Security "trust fund" has ZERO DOLLARS IN IT, IT IS COMPLETELY BROKE. Do you get that fact?
So let me get this straight....your entire point it that we are better off having our SS funds in a Gov't "trust fund" that is completely ILLUSORY AND BANKRUPT than we are having our SS funds in a stock market that has only lost half of its value and that ALWAYS eventually rebounds and grows?
If so, you are even more economically ignorant than I first thought and that's really saying something!
10:20am's Anon: You aren't the only one. I actually would've rather they simply cut the payroll tax for once.
Jim Morasson: I think the point was more that, in hindsight, there was motive for the personal (they were never truly "private") set-aside accounts other than attempting to improve the system.
Investing does not = saving. I don't place any faith in SS either, but embracing the stock market as an alternative is like trying to fix a flat tire with prayer.
Private accounts were always a dumb idea. The potential volatility (now realized) is just one reason. The bigger reason is that we would and could never have allowed large numbers of people to suffer the full consequences of their own faulty decision making. Let's say we had private accounts for a long time, and now here we are today and a bunch of people who thought they had just enough to live on through retirement now find themselves with half as much money - or less. Can anyone seriously think that the societal response to that would be "sorry, old folks, you will have to eat cat food for the rest of your lives". No, we would be looking at a bailout. Some would argue that a realization of this certainty would even encourage certain people to invest in a more risky way than they otherwise would have. THink that won't happen? That's what the banks did, enabled by creditors who lent to the banks knowing that they didn't have to really worry about the banks' soundness. That's what many homebuyers did, knowing that they could walk away non-recourse from a house they could not afford.
As a society, when we think about things like privatization of SS that appear to protect individual freedom, we have to think honestly about both the short term and long term consequences. Private accounts would have seemed for a while like they were a route to smaller government, greater personal responsibility, etc. But once they blew up? The net result would be bigger government. Better to recognize the risk up front and submit to SS (and Medicare, and probably health care reform) than to suffer the consequences that will arise from failing to be realistic about our society's stomach for making individuals bear the full cost of their decisions.
Jimmorrason, you cannot seriously believe that because the SS trust fund is fictional that SS security benefits will be zero. If you did believe that, I suspect you would be happy about it rather than angry, because it would point to a massive withdrawal of the social safety net - which you seem to favor.
Of course the truth is that SS benefits of some sort and some level will be paid. How we will finance that remains to be seen.
Note that the arguments for private accounts will always be loudest when the Dow is making new highs, and the opposition will be strongest when the market has tanked. WHich is exactly the opposite of the economic behavior you would need to make private accounts have any hope of working.
Sure, I'll bite. Stocks have lost 40% of their value. That's close to the amount Social Security will have to be cut to balance its books. And for current payees into SS, they will get a negative rate of return.
That's only true under current population growth assumptions, which is that birth rate will fall and we won't allow immigration to take up the slack. If the economy starts to stall due to a lack of workers, I think the chance of not opening up immigration to make up the difference is about zero.
If you were near retirement, your portfolio would have shifted heavily to bonds and you would have been far less subject to the oscillations of the market.
Maybe, but maybe not so much.
Owning a bond from a company going bankrupt, or a financial firm headed for receivership, isn't necessarily a great investment.
Appears some still won't let go of PA, even with what has happened to the market. Don't count them out I guess.
Anon @11:21:
Who was the congressman?
Too bad bush and co. didnt gey their grubby little hands on that money too.This is a financial coup,worldwide and we are being blackmailed by the banksters.they have emptied the treasury and are clamouring for more threatening worldwide calamity that is a real threat.They have off the books accounts and offshore accounts and NOBODY know where the money is going or if this will work.But we do know the FED {wich s a private bank} has created illegal ENRON like vehicles called maiden 2 and 3 to funnel more money to J.P.Morgan and other institutions no?And they refuse to say who it bailed out.
this is the greatest robbery in the history of the world without a single shot fired.
key word: "genuinely."
Actually, "cunning realist", it would have worked out just fine- what in the world are you talking about? Contrary to what you apparently think, the plan Bush presented for privatization wasnt to simply drop everyone's future social security benefit into the stock market, it was to give young people just entering the workforce the CHOICE of beginning to put SOME of their social security witholdings towards well-balanced private accounts. What people get out of such investments when they retire is a matter of the LONG-TERM rate of return, not the day to day swings. No serious economist would ever try to argue that the 40 year return on mutual funds etc could realistically end up being less than the goverment risk free rate of return, even WITH the recessions every few decades. And in the meantime there would have been more capital available in the US to help unfreeze the credit and get things moving again as a result of people choosing to contribute some of their witholdings to our markets. So nice try, but no, sorry, the fact that declines in GDP are part of our economic cycle does NOT somehow disprove the nutty notion that allowing Americans the CHOICE of participating in our free-market system as part of their planning for retirement is a good idea. If you live in some imaginary left-wing world where a 15 month recession is the same thing as a 40 year decline, fine go ahead and throw your witholdings at an antique social security that may or may not some day get around to paying you back with a crappy return... but why do you have to restrict MY choice of how to invest in my retirement and plan for my future and the future of my loved ones..?
Hold on...I get the idea behind your post, but think you missed a couple huge points...so lets compare the private account idea to what we have now for Social Security as far as savings..ABSOUTELY NOTHING...as we know, the money comes out of the premiums paid by workers currently, there is no big savings account in the sky...so would people be better off with being down 60% in a private account compared to the promise (backed by an debt we have to pay interest on) that I will get paid at some point in the future?...I would take the chance in the markets compared to the likelihood that our social security program will be in place in any current form in 30 years when I can start drawing on it.....I understand the personal responsibility aspect would cripple some people from acting, but thats why I believe the best answer is a choice....people can roll the dice and choose to participate in social security (and hope its still around), or they can choose the private account system....and to your other point that people would be pressuring the govt so save companies that should go under?? Are you kidding me?? What the heck do you think is going on with Freddie, Fannie, Citi, AIG, BofA, etc....the only difference is that the bondholders are forcing our government to act to protect their interests to the detriment of the tax payer...and a call from Wall Street bondholder invested in the debt of these companies carries a lot more weight on Washington than a 100 calls from middle America, as we have seen....great blog overall, but I think this post is way off base...
As the comments above show, they don't give up.
"they don't give up"...what does that mean? Sorry if I preach personal responsibility, something sorely lacking apparently in much of this rhetoric....
The SS "crisis" in the 80's led Reagan to double the payroll tax. This should have funded Social Security till 2060 or so. However, this money was not set aside to grow ad support the future needs it was planned to support. It was used to pay out *current* government spending, effectively looting the piggy bank.
THEN, because there was all this money in the piggy bank, Reagan reduced taxes on the wealthy.
There is Class Warfare. It has been waged on the poor and the middle class by the rich, and the rich have been winning for 30 years.
tompain said...
Jimmorrason, you cannot seriously believe that because the SS trust fund is fictional that SS security benefits will be zero.
______
I never said that. I simply stated the FACT that the SS "trust fund" is NON EXISTENT meaning it is no better off than a private SS fund in the stock market even if those stocks went all the way to ZERO. The money is GONE EITHER WAY, capiche?
And, if the SS privatization plan was simple a scheme to prop up Wall Street, why did Bush propose that it be VOLUNTARY? Gee, some "scheme".
Now....how many of YOU are naive enough to believe that if the SS system was totally privatized and invested in the market and LOST, that the "losers" wouldn't be bailed out by Uncle Sucker anyway?
SO THIS WHOLE DEBATE IS MOOT.
Yep, still an issue that gets a lot of debate, even after the past year or so. Incredible!
mhemp writes: "people can roll the dice and choose to participate in social security (and hope its still around), or they can choose the private account system..."
And, as follows logically, those who roll the dice, participate in the private account system, and lose 60% of their investment will be virtuously happy eating dog food and living in a cardboard box for their retirement, right?
The whole Private Account scam was, among other things, a huge invitation to moral hazard--if the private accounts did really badly, the government would end up bailing them out, whereas if they did well, the gamblers would cash in.
Funny...does this sound familiar at all?
This comment has been removed by the author.
What is this about? What we desire or what is feasible?
I desire: To eliminate the bogus SS tax I pay and my employer pays. I'll take privatization and no bailouts of those that rolled the dice, please.
What is feasible: The charade of solvency will last some time longer before interest on the deficit and Obama's porky weatherization wet dream consume everything.
There is no crime in giving someone the ***OPTION*** to invest their own freaking savings in the stock market.
Also, all this nonsense about Republican deregulation is so nauseating. What about BOB RUBIN, Clinton's Treasury Secretary? Why do liberals always forget to mention him when they lambast "deregulation" as the sole cause of this mess (ignoring the obvious Fed manipulation)?
see here: TCR's masterful Fed post
aaaaand here: Inthon
The left is breathless about deregulation while ignorning Rubin and ignoring the Fed.
The right is suddenly against wasteful spending after maxing out our country's credit card for our hollow, empty Iraq War victory
Seriously folks, can we get back to a common sense role for government where they just manage infrastructure and the courts?
We don't need Barney Franks and John McCains doing our saving, investing, and choosing which firms live and die.
Social Security has become a bogus "safety net" since it is now used as life support and both idiotic parties have spent all the money.
To sum up the above in one sentence: Don't give up your money and power to DC, period!
I agree with that last post...our social security contribution is a joke and a bastardization of a big spending program inititiated by FDR...everybody in this country needs to suck it up and prepare for their own retirement without relying on our joke of a government (which is insolvent and only survives based on the kindness of foreigners buying our debt)....how did we ever manage as a country for 150 years without social security? hmmm. For anybody claiming this private account system is a Wall Street led idea, probably right, but at least you would be able to keep your money. The current wall street bailout at work is much more insidious, screwing over the average tax payer by the bailout of debtholders in all the current Turbotax Timmy policies (which benefit the investment banks and hedge funds of the world that hold the majority of this debt)...
Ah yes, it was only going to be a "choice." Ha!
Do any of the PA boosters here know why SS was created in the first place? Rampant poverty among senior citizens. I'm not saying it is flawless. But it is important. Besides, we already have IRA's and 401k's. No one is being prevented from investing for retirement.
Anyone who says that everyone should save for their own retirement has never had to raise two kids on a waitress's income. Many, many people in this country can barely make ends meet, let alone save enough money to live on through 20 years of retirement. For those people, SS is all there is. It needs to be there, and it needs to be a defined benefit.
Lastly, the SS trust fund is not empty. It is filled with Treasury bonds. Last I checked, those were worth something. If you look at the bond market, many people seem to agree with me. Yes, yes, I know, that is just Uncle Sam promising to pay himself back. But they are still legitimate assets. I would direct anyone who disagrees to the 14th amendment to the Constitution, section 4.
The only reason Social Security is in trouble is that our "leaders" have looted it for years. That is not the fault of Social Security. It would be fine if it were administered honestly. The program is sound. It's our "representatives" in Washington who fucked it up.
If you killed SS, no one would be starving in the streets. Business and employees could save more, invest more and grow the pie.
In the abscence of forced charity, genuine charity steps it up. We don't need government instilling idiotic dependency habits since once started, they almost never end.
Privatization at least gives people the choice of investing something, which I would have liked to have (i would not have exercised that right!)
"Lastly, the SS trust fund is not empty. It is filled with Treasury bonds."
Actually it sort of is and sort of isn't. It would be bad enough if they were just issuing bonds to themselves at every T-bond auction. But it's worse. My understanding: The bonds held by the Trust Fund are a special class that are not tradeable and cannot be held or issued to any other organization. So you can say the Trust fund has, say, $500 Billion in assets. But it can't actually sell those assets for cash. (Being stuck in long term assets that there are no market for is the kind of thing that contributes to systemic banking failures like we're undergoing oh, say, right now.) If they issued "real" Treasury bonds the knowledge that they could be sold might very well force up Gov't borrowing costs. But they can't go to market.
Pretty skeezy, if you ask me. At least as skeezy as 90% of the stuff Wall Street gets ragged on for.
For the ideolically opposed.
Refuse to participate in Social Secuity, in any form, including Medicare.
Go to your corporate entities and purchase your own, or ... since you probably don't bleed like the rest of us, just "do it" on your own.
Oh, and while you're at it. Do not, under any circumstances, grow old.
Now, that's what I call "choice"
Good point.
For the past 20 years, investors have just poured their monies in WS with direct deposits. It was heavily promoted (marketed) by everyone. We were told that was the thing to do to replace the Traditional pension and people did it. But that allowed WS to go nuts with fees, derivatives, and schemes. WS and politicians were in bed together. Most people had no real representation. Most people who were saving for retirement didn't do their homework (and WS counted on that) because they couldn't handle the math, weren't motivated because it wasn't in their nature, had demanding jobs and didn't have the time to read pages and pages of legal and financial text, SEC filings, and financial journals; plus few knew financial history. So along came the CFP (what a joke) to work in our "interest" by SELLING us more financial products. This invest-on-automatic by working folks REQUIRED a strong SEC and regulatory environment. And it was no accident, that the opposite happened. Social Security will be the saving grace for many people, some who saved but were victims of high fees and low returns, and some who didn't save enough or didn't make enough to save. As outraged as people are now, where were they these past 20 years? Where was the representation?
Democracy Now had an interesting interview. My gut was uneasy in the late 90's, but in 2000, when I volunteered for a political camp for the first time in my life, I have been struggling with how politicians and ideologues operate. I witnessed first hand, what politicians will say or do. Rules weren't applied equally, it was wrong when a Democrat did it, but right or completely ignored when a Republican did it. It was a hint of what was to come on the National level. When I think of it, I feel like Linda Blair in the Exorcist. Everything we are taught as kids, growing up in a community, forget it. The politicians we have today, have no ethics or conscience. The commingling of Republicans and Christian Churches has done more damage to Christianity that anything else in my lifetime (and Catholics handling of child molestation). Facts, humanity, and commonsense be damn. The Democracy Now interview reminded me of that. I don't think private accts was ever about people, quality of life and safe retirement for individuals, it was the "Indonesia" factor.
"And the goal really—the goal is really to bring America to a closer resemblance to Indonesia. The goal is to avoid Denmark and get Indonesia. I mean, they say things like that. In 1978, a number of these financiers came out and said, “This country is just heading for a social democracy, and we don’t want that.” I mean, they used the term “social democracy.” They’re aware of these things. A few months ago in The New Yorker, there was an article about how Republicans had a loss for issues, and one of them said, “Well, the reason we’re at a loss is because we’ve accomplished all we wanted to. We’ve destroyed the social democracy.” And that’s their goal."
Yah, we're "all" for accountability.
Except maybe him
http://www.americablog.com/2009/03/no-money-was-exchanged-nobody-was-naked.html
or
him
http://www.bloomberg.com/apps/news?pid=20601103&sid=aDrMyMCgzqYw&refer=news
and
a host of other "high fliers"
You wonder, after explaining how the invested companies would benefit, whether the proponents of privatized accounts thought it through? I'd say, they did indeed and this sort of hedge against falling prices (with everyone subsidizing it and therefore the little guys paying back any gains anyway, as intended) was part of the deliberate plan.
tyrannogenius
Tax advantaged retirement plans were always a Wall Street stimulus package first. They did add fuel to the great 80's and 90's bull market. They also indirectly but importantly made the middle class stock market cheerleaders and free market fundamentalist believers.
That didn't work out too good, even discounting the last year or two. I can't link to it but a chart I saw of the rolling 10 year rate of return on the S&P has been in a vicious bear market since 2000.
The privatize SS thing was a last gasp effort to subsidize stocks. Bush pushed but I don't think Wall Streets heart was really into it. It is one thing now to fight off the growing hatred of the street but if the SS money had gone down too the hatred would be triple.
Anon @ 3/12/2009 12:57:
Those are assertions, nothing more. Frankly, I just don't believe it.
Anon @ 3/12/2009 1:00:
I did not consider that distinction. Good point, thanks for the clarification.
Most of the policies Bush push for weren't bad ideas. They were just implemented by incompetent people. The occupation of Iraq and the Katrina response are good examples. Private accounts may have and may still work. Just as long as Bush has nothing to do with it.
If you want to fix social security you need to create jobs from the bottom up.
this country isn't about that sort of thing.
this country is about jobs from the top down.
ALOHA !!
Well to fund SS and Medicare according to the Ex-US FED Dallas, TX governor Mr. Fischer would currently require $101.2 trilUSD ... not $101.2BILLION, but TRILLION!
Do the MATH!
Should he know? If US FED governors are fawned over their every word at FOMC meetings then I am surprised that bit of news isn't on the floor of the US CONgress up for debate right now!
The system has to continue of else it would end up being a MADOFF PONZI SCAM!!
Come to think of it .... What's the difference? Those who got in "early' get paid and those at the end DONT!
Its the MONEY STUPID!
And you think Social Security is going to be there when I'm ready to retire in about 30 years?
Who's deluding who, buddy?
I tell ya, I'd much prefer to have 50% of the money I invested available to me rather than 0%. And of course 50% would be ONLY if I were stupid and kept all my money in stocks up until the moment of a 50% crash. Most people would keep their money in targeted retirement funds which rebalanced their money into safer bonds moving toward retirement so that a market crash would be of little consequence. Vanguard and Fidelty (among others) provide these and they're incredibly easy to use.
But to the committed statist, social security is an unquestionable fact of life. It is inconceivable to them that it might not be fundable or that in funding it the currency might be inflated into oblivion.
So let them have social security, and let them eat cake too.
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