Read his take on Social Security........
About that math: Legally, Social Security has its own, dedicated funding, via the payroll tax (“FICA” on your pay statement). But it’s also part of the broader federal budget. This dual accounting means that there are two ways Social Security could face financial problems. First, that dedicated funding could prove inadequate, forcing the program either to cut benefits or to turn to Congress for aid. Second, Social Security costs could prove unsupportable for the federal budget as a whole.
But neither of these potential problems is a clear and present danger. Social Security has been running surpluses for the last quarter-century, banking those surpluses in a special account, the so-called trust fund. The program won’t have to turn to Congress for help or cut benefits until or unless the trust fund is exhausted, which the program’s actuaries don’t expect to happen until 2037 — and there’s a significant chance, according to their estimates, that that day will never come.
Let's put his in a simple context.
You give me 12.4% of your paycheck every pay period (6.2% of your pay and your employer match).
I take that money and put it into a special account; call it a trust fund.
Now you don't have any right to that money until you retire but I have every ability to borrow that money and replace it with IOU's.
Of course, I'll use the money for something productive like strippers and Jack Daniels but it's all good because I'm going to pay you the IOU's back.......... with interest!If social security were to keep accounting records as the SEC requires private companies to do, there would be 35 TRILLION dollars worth of IOU's from a federal government who doesn't have the money to fund it.
But it's all good because the feds have borrowed that money and invested it on strippers and Jack Daniels. Actually, that would be a much more productive investment than tunnels for turtles.
Between me and my employers, we've kicked in about $55,000 into "my" social security "account". Based on what my future benefit will be, the net present value of that money would be about $155,000 giving me a whopping 3.35% return on my investment. (here's a place where you can see your ROI based on your age and contribution rate).
By the way, I calculated my return with a simple annual compounding as opposed to when the Treasury got that money. As any investment professional will tell you that's a big deal over a lifetime.
Now I'm no Wall Street investment banker but I could get that kind of return by just investing in CD's over my lifetime. And these guys are worried we may not invest it as wisely as they do?
But here is what's truly pathetic. If I die tomorrow, that money doesn't go to my kids or my wife (since she's worked her whole life, she'll collect on her own contributions) the feds get to keep it.
Isn't that a great deal for everyone!