Quote:
Originally Posted by Guest
That's the problem, it's been depleted because it is a bad investment. Even if it makes 3%, which may not be accurate, it doesn't do any good if congress borrows from it. I do realize that right now, we have the baby boomers retiring and siphoning off a more than is coming in. Let's be honest, the whole process is very similar to a Ponzi scheme.
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I'm afraid this statement shows a complete lack of understanding of how the SS Trust fund works. The 2.78 trillion currently in the fund is INVESTED in the only place permitted by law---US Treasuries. So the rate of return is about 3%--it is the average interest on 30 year T-bills over the last 30 years. In a sense, Congress is "borrowing" it, since T-bills are how the government borrows money, but they are also paying the interest, so it does "do good". The privatization argument states that instead of investing solely in treasuries, some of the fund could be put into equities for a higher rate of return, but also a higher risk. This is NOT some sort of self directed proposal where YOU choose where to invest YOUR money---God help us all if that was allowed. Right now, the fund will continue to grow until 2019, when the demographic reality of baby boomers hits, and from then on is depleted until it hits zero somewhere around 2035, so early planning is essential, if the politicians can ever agree to do anything