Peter points out that even if Social Security paid all its’ promised benefits, it returns a miserable rate of 1.5% or less — and for many workers that number drops into the negatives. Peter compares the broken system to a bank you’d never want to use:
It’s like putting your money in a bank. But instead of the bank paying you interest…you pay the bank interest.”
To make a bad situation worse, Social Security can’t even do that. In fact, it won’t be paying workers anything in 20 years. Peter explains that it already runs a deficit and is heading towards financial ruin and workers who have paid into Social Security their whole lives won’t even get pennies to show for it.
Jim and Peter describe that in effect, Social Security is like a giant Ponzi scheme. The first beneficiaries made out like bandits, and the rest of us are left holding an empty bag.
Peter goes on to outline a plan that would not only fix social security, but would provide the economy a much needed boost. Listen to the player above to for an interesting and enlightening conversation on the problems — and solution — to the Social Security catastrophe.[Subscribe to the Heartland Daily Podcast free at this link.]