Al Gore's biggest swindle

By Joe Schembrie
web posted October 16, 2000

Al Gore has proudly announced that he wants to steal your financial future. So where's the outrage?

Mind you, we're not talking here about trivial piffles such as corruption, immorality, criminality, or high treason. We're talking about your personal, craven, materialistic self-interest. If you are an average American citizen, Al Gore intends to swindle, rob, and con you out of hundreds of thousands of dollars.

Millions of Americans -- the poorest of the working poor -- will be left destitute in their old age. And to add to the gall -- Gore expects you to thank him for it!

The theft, ironically, is called 'Social Security.' Briefly, let's look at some numbers.

The key to your hidden future wealth is called 'compound interest.' Say you invest $3500 each year into a tax-free money-market fund at seven percent interest. Let's say you start at age 22 (fresh out of college) until 65 (retirement). How much money would you have at the end?

$930,000.

Yes, that's right, you would have close to a million dollars.

Net investment, with annual investment of $3 500, ages 22 to 65, a 7 % interest rate
age
amount (US$)
22
3,500
23
7,245
24
11,252
25
15,540
26
20,128
27
25,037
28
30,289
29
35,909
30
41,923
31
48,358
32
55,243
33
62,610
34
70,492
35
78,927
36
87,952
37
97,608
38
107,941
39
118,997
40
130,826
41
143,484
42
157,028
43
171,520
44
187,026
45
203,618
46
221,372
47
240,368
48
260,693
49
282,442
50
305,713
51
330,613
52
357,256
53
385,764
54
416,267
55
448,906
56
483,829
57
521,197
58
561,181
59
603,964
60
649,741
61
698,723
62
751,133
63
807,213
64
867,218
65
931,423

But instead, this money is being funneled -- and lost -- into the political scam known as Social Security.

On average, American workers pay $3500 in taxes to Social Security each year. They retire at age 65. But do they get nearly a million dollars back? Not quite.

Social Security funds aren't really invested by the government, so any return at all is purely by political fiat. However, we can calculate the cash flow return. We know the total Social Security system expenditures this year are about $500 billion and the number of recipients is about 50 million -- so each recipient gets back about $10,000 per year.

In contrast, the personal investment fund of $930,000 would generate, at seven percent interest, a cash flow of $65,000 a year.

The difference between 'investing' your money in Social Security and investing your money privately is the difference between a retirement spent collecting empty soda cans and a retirement spent collecting frequent flyer miles.

(NOTE: Unlike a private investment fund, Social Security disbursements are controlled by a maze of regulations -- so individual numbers will vary. But since a private fund is a real investment and Social Security is only a government accounting trick masquerading as an investment, the fact remains that cash flow is MUCH higher for a private fund.)

Is seven percent a 'risky scheme' interest rate? No, it's lower than the stock market's rate of growth over the past decade. It's much lower than the eleven percent real rate of return that people in Chile are said to be enjoying under their privatized equivalent of Social Security.

Besides, if the economy tanks, the government won't be able to afford our current Social Security system, either. Indeed, isn't it having enough trouble funding Social Security right now, during the biggest economic boom in history? It would seem that, no matter how rich or poor you are, a bad investment is never a good idea!

Unfortunately, the government of today -- and of Al Gore tomorrow, if he gets elected President -- will force you to 'invest' in Social Security. It will be the working poor, who do not have private pension benefits and cannot afford personal investments, who will get hurt the most by being deprived of an alternative investment opportunity.

Al Gore, who proudly proclaims, "I will put Social Security in a lock box," may as well say, "I will steal hundreds of thousands of dollars in lost investment income from every working person in America -- even the poorest -- and leave them destitute in old age."

George W. Bush wants to privatize just two percent of Social Security taxes. But obviously, his 'hidden agenda' is that once people see how fast that investment is growing, they'll want to switch to a hundred percent privatized system -- and retire rich.

If liberal Democrats truly were compassionate, they would hail Bush's plan as a great experiment -- little to risk, much to gain. But instead, they're portraying it as an evil plot to loot the American public.

Well, do the math, and you'll see who the real thieves are. The Democrats' plans will steal over three-quarters of your retirement assets. How? By putting your money in the low- (actually, non-) interest earning Social Security 'lock box' watched over by Democratic Party politicians. And we're assuming that they'll never again raid the remainder from that 'lock box' -- a 'risky scheme' indeed!

Al Gore wants Social Security to continue swindling, robbing, and conning Americans at a cost of hundreds of thousands of dollars per worker. And I just want to know, where is the outrage?

Joe Schembrie is a senior writer for Enter Stage Right and can be reached at joeschembrie@enterstageright.com.

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