No. of Recommendations: 7
I was reading the Winter 2005 Efficient Frontier, 'The 150 Billion Dollar Question', by William Bernstein, and ran across his commentary on social security privitization. Here is an exerpt that made me laugh:

Originally, the system was sold to the public as privatized, but quickly wound up as a social welfare program. Even today, the Social Security Administration mails out individual "account statements," as if each of us had our own separate little brokerage account with them. And yes, to a certain extent, benefits are roughly proportional to "contributions," but there is a strong redistributive element. And the "trust fund," let alone the concept that benefits are paid out of savings, are expensive myths. Social Security is strictly a pass-through system; remove it from the public domain and it becomes easily recognizable as a Ponzi scheme that would take the breath away from even Messrs. Fastow and Ebbers.

Here is the entire paper: http://www.efficientfrontier.com/ef/105/goldrush.htm

Russ
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