I'm talking about a successful government system which is not a Ponzi scheme but a retirement savings plan that the people actually own and which has a rate of return which makes the US Social Insecurity system's (merely theoretical) return look pitiful by comparison.
This year, on May 1st, Chile celebrated the birth of it's privatized Social Security System. They were the first of some thirty other rational countries to "just say no" to government Ponzi schemes which were headed for default and say yes to a privately held, government regulated retirement system that has not only out-performed all expectations but befuddled the leftist naysayers who cannot stand the idea that any system that isn't administered by elite government central planners can succeed in aiding ordinary people in providing a great retirement for themselves.
According to an article in the Investors Business Daily on April 29th;
"In 2005, New York Times reporter John Tierney worked out his own Social Security contributions on the Chilean model and found that his privatized pension would have been $53,000 a year plus a one-time payout of $223,000. The same contributions paid into Social Security would have paid him $18,000."
The return on investment since inception for the Chilean system; "Over the last three decades these accounts have averaged annual returns of 9.23% above inflation. By contrast, U.S. Social Security pays a 1% to 2% (theoretical) return, and even less for new workers."
Of course as any even semi-informed citizen of this country knows, there is no Social Security Fund with any real assets in it for American people. The money has already been spent buying votes from the people who put the money in in the first place. The "Fund" is just an accounting device "account" full of government IOUs promising to print enough paper dollars to satisfy the claims of those who have paid in all their lives. (Until 2037 anyway, when even those Tooth Fairy promises also run dry.)
As part of the law the people in Chile actually own their own accounts as private property, just like your 401k or IRA accounts in this country.
In a world where American "progressives" are constantly comparing the US to other countries to see if they can find a way to denigrate our way of life, they forgot to compare us to the thirty-ish other countries who have come to their senses and left America in the dust on this one.
It's enough to make you wonder what the climate is like in Chile.
6 comments:
It's hot in the USA today. I'm thinking it'll be Chile for me and my family tomorrow!
I'm doing what I can to see to it that that doesn't happen to you.
In the mean time all I can suggest is that you do what I did. Assume that they have stolen all your money, which is true of taxes generally, and then save all you can in IRAs and the like.
I assumed I would never see a dime with the thought that if it somehow turns out that I got something which could buy more than a loaf of bread it would be "mad money."
Chile indeed, can I post this at LCR? Great piece...
Thanks. Post away!
Grant, that is a sound theory that I am also practicing. I enjoyed the article. Is the Chilean system mandatory? From what little I have read I still like it better than the US "system," but that doesn't say much. My old talking points still apply--if you are only getting a return on money you put in, why can't I do that on my own without government force? If you are getting more than just what you put in (i.e. the current US system), well that is just plain un-Consitutional and un-fair.
http://libertysrest.blogspot.com/
I'm glad you enjoyed it. I would also prefer that no force be used.
Having said that, most governments insist that people either provide for themselves or be forced into a government system. In Chile, you have a choice of government or private, but you must participate.
Almost everyone opts for the private option.
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