JoeTheEconomist
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- Sep 4, 2015
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- #301
All socialist programs end like this. Abused, bankrupt and a bottomless hole demanding ever more money. And in the process they feed a huge parasitical bureaucracy and they create an underclass of dependents who can then be bought by politicians for a mere subsistence living.
Not to mention the expansion of government surveillance and intrusion necessary for such a program and the moral hazard of convincing people to casually live off money stolen from other people.
As Daniel Hastings warned when he opposed the original SS bill in 1935 the effect on Americans will be to "bring its people to the level of the average European". Can anyone argue with this as you watch millennials embrace full socialism now?
And note...all Marxist programs like this are so damn attractive that you have to threaten your citizens with prison for not participating. It is the only way it can work...according to the site linked to by Joe above Social Security costs the average American $600,000 over a lifetime. It has cost me well over a million dollars. Social Security Solutions, Social Security Crisis, Fix Social Security
A hell of a government deal. "We will impoverish you over your entire working life and then point out how much you need government to live when you are old."
The $600,000 was more complicated (the market has done better than 4%):
$600,000? That's Crazy!
Our defintion of cost is lost savings, which is what you would have if you had invested your contributions in a fund that you could not touch until retirement?
Our calculation looks at a typical worker born in 1970 who makes 2/3rds of median income. That is about 34K in 2010. We assume that the worker has 6% unemployment over the course of the year. We invested the actual contributions in an actual S&P 500 index stock fund. We don't have actual returns for future S&P 500 returns. So we look at rolling 40-year periods, and take the lowest return which is about 4% real on average.