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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Skeeter Bug who wrote (84801)	11/2/2000 2:09:38 AM
From: Don Lloyd	Respond to of 132070

sb - i guess i would exclude everyone that didn't pay into it for their entire lives. iow, for those who paid in their entire lives, what is the avg rate of return? i would be impressed with 70 cents on the dollar. remember, a lot of folks who die before they can collect get nadda. If you include the people who die before starting payments, the net return must be less than one since there can be no real investment. Every dollar paid out must come from either payroll taxes or general taxes in the form of interest payments on treasury debt or new treasury borrowings. This would not be true for a private insurance company making the same payments in an annuity, since it has the possibility of earning substantial real returns on real investments using the float of premiums paid. Regards, Don