Category Archive: Social Security
Peter Ferrara argues that Social Security benefits yield a lower rate of return than a typical blend of stocks and bonds. On top of this, it is highly unlikely that Social Security will be able pay all the benefits it has promised. Personal accounts, he argues, are the best alternative to the current Social Security system. Personal accounts would be great for workers, offering them a large asset that could be assigned to family, more choice, and the opportunity to own a portion of the capital stock.
Prof. Antony Davies analyzes Social Security in the United States through the lens of a typical 22 year old American. Assuming that Social Security is completely solvent, the expected return on investment (ROI) of Social Security is far lower than the expected ROI of a private account. Further, if an individual could hypothetically opt out of Social Security payments and invest the funds entirely in Treasury Bills, the Treasury bills would even yield a greater ROI.