I am sorry, I meant to say 20%, and even that is inaccurate, it is 16.66%. Also, I suppose that it can add up to a trillion in 10 years, I got confused with another set of figures I recently looked at.
Anyway, I finally found the transcript of the debate with the relevant claim:
"And you bet we want to allow younger workers to take some of their own money. See that's a difference of opinion. The vice president thinks it's the government's money. The payroll taxes are your money. You ought to put it in prudent, safe investments, so that $1 trillion, over the next 10 years, grows to be $3 trillion. The money stays within the Social Security system. It's a part of the -- it's a part of the Social Security system."
Assuming, as you do, that there is only ten years to grow, at 10%, in the first 7 years, it would double. Then, in the next 3plus years, it would gain another 50%. Thus, at the end of about 10 years, it would be at $3 trillion, supposing the initial accumulation of $1 trillion. I am sorry that I had to clear my head to get that your assumption was wrong, and that he was making a simplified- model statement, assuming the 10 years of equity growth followed the initial accumulation of $1 trillion. Since the middling age of the work force is about 45, it is reasonable to project 20 years until retirement, and therefore it gives a rough picture of what could be accomplished........ |
