By Jerry McDonough
Who can forget that socialist icon FDR and his gift to the unsuspecting American people? Of course, I am referring to the Social Security Ponzi scheme; taking wealth from one group to award it to another just to pay the bills. FDR saw that the program might cover the present costs, few lived until 65 then, but it would not cover future costs judging from the numbers derived from the government studies. FDR said in 1935, “It is almost dishonest to build up an accumulated deficit for the Congress to meet in 1980.” And, short we were exactly as Ponzi schemer FDR had predicted when Ronald Reagan put in a temporary fix in 1982.
Of course, today’s socialists push the old canard that the employers pay half of the employee’s contribution, but has anyone ever given thought to the fact that without Social Security the employee would have that half in their paycheck to invest? Another fallacy pushed by socialists is a retiree receives more than they contributed to the system. But, this is not true. Social Security monies were originally placed in a compound interest earning account, like a simple non-taxed IRA. Had that remained constant most if not all Social Security recipients would be millionaires upon retirement after forty years of paying into the system. But, greedy socialists in government cannot keep their hands off “free” money laying in an account.
The Chileans figured this out after their conservative government led by General Pinochet removed all the socialists from government in Chile. A recent study by Dictuc in consultation with the University of Chile showed that male workers who contributed ten percent of their salaries into their retirement account for forty years or more on average earned retirement checks worth about 87 percent of their top salaries. In 1981 Chile Labor Minister Jose Pinera replaced the country’s bankrupt social security system, a system very much like America’s, with a 401k like system run by private enterprise. It redirected workers existing social security monies into the market based system of investment choices and allowed workers to make their own decisions with assistance from private companies in the program.
The results the Dictuc study showed were that over 30 years workers received six times the return on the money that had been in the old, bankrupt system now that greedy politicians could not touch the privately invested money for their socialist programs, such as LBJ did for his “guns and butter” program. Currently, workers return on Social Security in America for those currently retiring is ZERO and those entering the work force can look forward to a negative return. Data shows that Chilean workers earn 8.7% compound rate of return above inflation over a period of 32 years from 10 percent of the invested salaries. To put it another way, workers earn seventy three percent of their pension by way of compound interest earned on their 27 percent investments. American workers could earn that much and more if we were to caste out the Ponzi scheme Social Security system now in place.
Almost 30 other countries have adopted the Chilean retirement plan, but, oh not America with its greedy socialist government. Financial markets might fall to zero at the end of time, but Social Security will be bankrupt along with the end and probably long before the end. Maybe it is time to flush the socialists out of government in America and get on with our Founder’s business.
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Stumptalk is published weekly in the Crossville Chronicle. The opinions expressed in this column are not necessarily those of the Chronicle publisher, editor or staff. To contact Stumptalk, email coordinator Jim Sykes at email@example.com.