Mark Walsh of The Left Jab is wrongly skeptical of the future $28 deficit that will be created because of Social Security. Dan Mitchell is right. Last April I uploaded a picture showing the figures for 2008. If you think those are big numbers, just look at the cost of Social Security and Medicare combined. Gary North recently pulled a statistic (the picture is below) saying the new total for unfunded liabilities is $100+ trillion dollars. That's a big jump from two years ago.
If you watched the above video you will notice that Dan calls Social Security a "Ponzi Scheme." He was alluding to the fact that Social Security takes in more than it pays out and that it is broke.
What he didn't say was how long it has been broke? Social Security has been bankrupt for over 30 years.
An old copy of Biblical Economics today from Oct/Nov 1978 attests to the statistical bankruptcy of social security over 30 years ago. I quote:
The Social Security System is actuarialy (statistically) bankrupt. It's only a question of when it will go under, and the form of bankruptcy it will take. Without massive monetary inflation, there is no way that someone entering the program today will ever be repaid for the heavy taxes he will shell out. In order to postpone the statistically inevitable, Congress in late 1977 enacted the heaviest peacetime tax increase in U.S. history. Anyone doubting the magnitude of this tax burden need only turn the page and examine the table prepared by Huggins & Co., consulting actuaries. The table is based on the government's own figures.
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If you want to believe that social security is fine, go ahead. But at least take a look at the numbers below.
There is a solution to social security - and it is called privatization. It is not mean. It is not cruel. It is fiscally responsible and completely moral. What isn't moral are the defenses politicians on the left give for social security such as "the public safety net" argument, or the "you wanna put social security in the hands of Wall Street" argument, all while pretending that the current way of doing this is okay. (Who mentioned Wall Street anyway?)You must understand that social security is one of the many failed policies that the left has rammed through Franklin Delano Roosevelt's New Deal of the 1930's. The policy doesn't provide social "security" but rather "insecurity" because it is bankrupt.
As Dan Mitchell said in the above video, "they [the people of Chile and other countries now have privatized social security systems] know that it's better to have real assets that you can pass on to your children, than to rely on politicians. And a good example is the U.S. System. Mark keeps talking about 'oh 2041, we have a trust fund.' The trust fund is filled with I.O.U.'s. The politicians have already spent the money."
Jose Pinera, the "architect of Chile's private pension system for retirement accounts," discusses how to go about doing that below.