A while back I read that the Social Security System has an unfunded pension liability between 18 and 25 five trillion, I say, trillion, dollars.
What that means to us is this... Pretend the Congress decided today to stop all future payments into Social Security and for the system to just pay out in benefits what it has collected to date, it would take 18 to 25 trillion (let me repeat) TRILLION dollars just to pay back what they have collected. All that money we, the taxpayers, have been paying into has been loaned to the federal government to pay for important projects like the bridge to no where or mohair subsidies to Sam Donaldson.
What I find even more interesting is that the numbers are so large, actuaries can only narrow the figures to +/- 4 trillion dollars.
Unfortunately for Ken Lay and Jeff Skilling, they don't work for the federal government, otherwise they never would have been charged for fraud and theft... instead they would have been promoted.
I just did a little math to check this out. Assume Jim Doe graduates from college and earns a starting salary of $20,000/ yr. and maintains that salary in real dollars for the next 40 years of his working life (age 62). If you took his 6.2% that he pays into the Social security fund as well as the 6.2% match his employer and put those funds into an IRA paying 5%, he would have an account balance of $314,000... Enough to pay him his current salary for the next 31 years (age 93).
What's even more interesting, let's assume Jim is gay and has no children and he dies at the age of 61. Under the social security system, how much would his partner be entitled to in benefits? If you answered a big fat zero, you get a gold star.
Under a privatized plan, he would be able to leave $300,000 to his partner.
Why doesn't the media tell this intriguing tale of fraud to the general public? My guess is that actuary science is not nearly as sexy as reporting another drug dealer getting capped. It might also be that Trixie, our friendly superhero/news reporter, is too dumb to understand all these "number kind of things". Besides, she doesn't have the time to learn it because she's got another botox and collagen appointment to get to.
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