Social Security

Fire of Liberty

Bill Steigerwald of The Pittsburgh Tribune-Review has an interesting Q&A column with The Wall Street Journal's "Americas" columnist Mary Anastasia O'Grady on Chile's private pension system. According to the column, the nation of Chile has had this system in effect for some twenty years and some 60% of the nation's workforce is enrolled in the system, where the put 10% of their income into this personal account. Unlike the paltry 2% rate of return under the current US Social Security system, Chile's usage of personal accounts in its Social Security system nets a rate of return of 10%. I realize that people will argue that Chile is different than this nation in a lot of ways but they have discovered that the markets and the freedom of choice is far greater than government intrusion into their lives.

People in the US shouldn't be victims to our own declining demographics like we will, if people continue to refuse to see the forrest for the trees. Maybe it's the fact that I'm 28 but I don't imagine I'll receive Social Security benefits comprable to my grandparents. With the knowledge of how dynamic and powerful the free market has been for the 50% of the nation who either own stocks, 401(K), IRA's or Thrift Savings Accounts, why would anyone want to be in a low rate of return government enterprise like Social Security. FDR noted in his January 17, 1935 message to Congress that he expected the "old-aged pensions" should consist of "...voluntary contributory annuities by which individual initiative can increase the annual amounts received in old age. It is proposed that the Federal Government assume one-half of the cost of the old-age pension plan, which ought ultimately to be supplanted by self-supporting annuity plans." (See here). Even the father of the new deal realized that this proposed system had to evolve into a personal system, why can't others see it this way.

If Chile can do this and achieve such success on an $80 billion economy just think what the US and its $11 Trillion dollar powerhorse of an economy can do. To fully understand the power of Chile's social security and its reforms and its creator Jose Pinera check here, here, and here. If these politicians in Washington D.C. just read some demographic stats on our future our look at the paltry rates of return instead of playing it up to special interests, we would be on a better path. Aside from my fight for freedom and liberty against the forces of tyranny, I also fight against the slothy governmental systems in this nation.