A reform like none other for the 21st century.
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Yet, their account would still be sufficient to pay them about 75 percent more than Social Security promises them, increased annually for inflation just like Social Security. This assumes that in retirement the couple switches to a lower-risk, conservative portfolio of government and high-grade corporate bonds earning on average a real return of just 3 percent.
These calculations are consistent with the experience of the already existing, real world versions of personal accounts. Chile’s personal account system survived the financial crisis with no bankruptcies in the personal account investment fund. Indeed, not even a dollar had to be paid out on the guarantee backing the accounts, as the lifetime of savings and investment in the accounts still provided benefits greatly exceeding what the old system even promised.
Local government workers in and around Galveston, Texas, also chose a personal account system to replace Social Security entirely 30 years ago, when that was still allowed for state and local government workers. Returns on the accounts declined for a couple of years during the financial crisis, but no one lost their retirement funds, with all still enjoying much higher benefits than Social Security. Similarly, the personal accounts enjoyed by federal workers in the federal Thrift Savings Plan (TSP) suffered declining returns for a couple of years, but the accounts have since recovered those losses, as documented on the website of the TSP.
In my book America’s Ticking Bankruptcy Bomb, I argue that by modernizing our old-fashioned, tax and redistribution entitlement programs to rely on 21st century capital, labor, and insurance markets instead, we can achieve all of the social goals of these entitlement programs far more effectively, serving seniors and the poor far better, at just a fraction of the current cost of those programs. Rep. McCotter’s bill is a demonstration of that.
A man of faith in a godless age is hitting Americans where it hurts.
Mr. and Mrs. American Spectator Reader, let P.J. O’Rourke talk sense to your kids.
In Britain, defending your property can get you life.
It won’t take long for conservatives to scratch this presidential wannabe off their 2008 scorecard.
Was the President done in by the economy, or by the politics of the economy?