Is Social Security a Good Deal? Antony Davies Answers
Monday May 16th, 2011 • Posted by Emily Skarbek at 8:41am PDT • 5 Comments
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I am not in disagreement about private accounts, but I think this video gives WAY too much credit to social security.
Under private retirement accounts as well as private solutions to Medicare and Medicaid, should we also expect to see the rate of return on market investments increase thanks to the lower tax burden?
Most discussions I see on privatizing Social Security speak in terms of conditions TODAY without also taking into account the fact that market conditions would be far more favorable without heavy taxes, bureaucratic regulatory schemes, and flawed monetary policy.
In particular, I think that last one is one of the ways in which personal retirement accounts lose their purchasing power in the first place, leading to critics saying, “See! I told you the market would fail on handling this one!”
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MG says:
Sadly, the worse issue with Social Security may not be that it is a homogeneously/uniformly mediocre retirement deal, but rather that it is already, and it is likely become even more of, an instrument to simply redistribute wealth through the tax code. However meager these returns may be, as the system’s ability to pay them is challenged by fiscal realities, redistribution will get worse, through more progressive formulas, higher taxes on payouts (taxes on taxes), and simple exclusion (what they call means testing). Is one thing to accept one’s returns on a life time of payments into this plan be confiscated to allow for the low-earning cashier to get a more handsome return, is another thing to see this subsidize life-long payments to the bulk of the officially disabled whose returns on no payments must be enormous.
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[...] “Is Social Security a Good Deal?” (video) [...]
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Ranma says:
MG, what you say is obvious. Taxes themselves, by their very nature, are a means of redistributing wealth.
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Great info! Thanx....