You often hear from politicians that we must protect the Social Security “trust fund,” but the truth is that there is no such thing. They know that – or at least they should know that. So they are ignorant and/or trying to deceive you, both of which are bad.
The government does not have the capability to set aside funds in a bank account like we do. When the Social Security funds come in they are spent on Social Security, or, as they have done for decades, on other spending projects they didn’t want to raise taxes to fund. Decades of dishonesty and financial mismanagement by both parties are becoming more visible.
If some of these Social Security funds went to private investments that you could control then that would limit how much the politicians could abuse. But they don’t want to lose control, so they play on your fears that something bad will happen.
Yes, the market could crash and you could lose your investments. It is a risky world. But think about this: Whether your private account crashed or not it isn’t like the government is saving our taxes today to pay out tomorrow. Either way the payouts they will make 10 years from now will come from taxes paid 10 years from now.
Simply put, we can’t lose by having at least part of current contributions devoted to private accounts. The politicians will lose because they’ll have to find a way to fund current spending, or not spend the money at all.
Don’t let fear-mongering by politicians fool you. The system has been broken for a long time. Democrats didn’t want you to be informed and Republicans didn’t try hard enough to inform you. But it isn’t that complicated.
John Stossel touches on this a little bit.
http://patriotpost.us/opinion/john-stossel/2010/08/18/obama-demagogues-private-enterprise/
“A typical retiree in 2008 would be entitled to a traditional Social Security benefit of around $15,700 per year,” Biggs writes. “For workers who chose personal accounts, this traditional benefit would be reduced by around $7,800. However, the worker’s personal account balance of $161,500 would pay an annual annuity benefit of around $10,100. This $2,300 net benefit increase would raise total Social Security benefits by around 15 percent.”
So, even if someone retired after the financial crisis, they still would have came out ahead.
To me, putting our money in the hands of politicians is a much bigger risk than anything on Wall Street.
“yes, the market could crash and you could lose your investments.”
Or politicians could spend them on their pet projects. I’d rather take my chances with anything but politicians being guardians over my retirement. Of coarse for the previous generations it has done OK, which is typical of any ponzi scheme. It’s funny how many people, especially younger people, who think that SS is going to be there for them. They have to be the most gullible of the suckers that have been required for the scheme to work. Good thing these kind of accounting tactics are illegal for the private sector, else there wouldn’t even be a market to invest in.