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Politics : Al Gore vs George Bush: the moderate's perspective
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To: Lino... who wrote (3324)10/21/2000 2:03:40 AM
From: fuzzymath  Read Replies (1) of 10042
 
Just one point: Social Security money isn't "invested" like you and I invest money. The income received from the currently working people is immediately paid out to the retired Social Security recipients. Gore pointed this out in Debate #1. Social Security is not a savings program, not an investment program. It's a transfer of money from the younger working people to the older retired people.

Right now we have a Social Security surplus only because the Baby Boomer generation is so much larger than the retired generation. When Baby Boomers retire, the ratio will be so out of skew that the younger working people will have to pay 2-3 times what is paid now -- or, the Baby Boomers will not be able to get back what they put into Social Security.

It's pure demographic mathematics. So -- the 2% return is because no money was actually invested in the past.

Kevin/fuzzymath
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