Sunday, February 15, 2009

LA Times: Social Security isn't broken; don't 'fix' it

Michael Hiltzik writes for the LA Times that

They say that even the worst tragedies harbor the seed of something good. So here's something positive in the stock market's gruesome behavior over the last year: It may finally have driven a stake through the heart of the campaign to "fix" Social Security.

Let's be plain about one thing: This campaign, cooked up mostly by Wall Street investment houses and conservative Republicans, was always about "fixing" Social Security the way one "fixes" a cat.

You get the feeling where this is going. My wife just gave birth so I'm a bit sleep deprived, but if I can be motivated I'll dissect this one later.

4 comments:

Bill Woessner said...

Despite the stock market's "gruesome behavior" over the last year, the dollar cost average real return from the S&P 500 over the past 40 years is still 5.25%. Compared to the negative real return the median worker can expect from Social Security, I know which one I'd pick. Every day of the week and twice on Sunday.

Andrew G. Biggs said...

Bill,

Good point. If you browse around you'll see a recent paper where I simulated personal accounts for people retiring today using historical market returns; even folks retiring now would have done ok, for the reasons you mentioned. Also, I did a post today showing the returns earned on the Social Security trust fund; the average return from 1940 through 1986 was negative, and the average through 2008 was less than one-and-a-half percent.

Jim Glass said...

Congratulations!

Andrew G. Biggs said...

Thanks, Jim -- much appreciated!