Let's Understand Social Security and Stimulate Investment

Author Loren Meierding points out thirteen principles of voodoo economics underlying many political arguments on economic matters. He explains how the Social Security 'Trust Fund" will function and why the maximum theoretical replacement of pre-retirement income with current pay-as-you-go Social Security will yield much less for future retirees than a system with investment in personal retirement accounts.

Meierding compares the costs in dollar terms for several periods through the year 2060 of an essentially unchanged Social Security system with the costs for a reformed system with voluntary personal retirement accounts. Transition costs are evaluated. The reformed system analyzed assumes an average 4 percent of income will be invested in personal accounts. A reformed system will clearly improve investment and standards of living.