In today's WSJ, Treasury Secretary John Snow quotes the late Patrick Moynihan: "We all have our own political views. Before we proceed, can we agree to get the facts first and only after we have the facts bring our own political views into play?" The facts Mr. Snow wishes us to agree upon concern the systemic failure of our national pension system:
...the Social Security Trustees report has said the system is not financially sustainable and every year we fail to act the problem gets more severe. Social Security has a long-term structural deficit-currently forecast to be more than a $10 trillion shortfall. Each year we wait to fix the problem will cost an estimated $600 billion, according to the trustees report.
However, certain individuals seem to have a bit of a problem accepting the facts; for instance Roger Lowenstein in last sunday's NY Times Magazine:
No one can definitively predict that outcome [the long term financial state of the trust fund], either, of course, but David Langer, an independent actuary who made a study of Social Security's previous projections compared with the actual results in 2003, thinks the "optimistic'' case is its most accurate. Over a recent 10-year span, the trustees' intermediate guesses turned out to be quite pessimistic. Its optimistic guesses were dead on, and its pessimistic case -- sort of a doomsday situation -- was wildly inaccurate.
It's interesting that those who claim privacy advocates wish to gamble with retirees' financial futures base their arguments on "optimistic guesses" and ignore that real gains have been made in countries that turn to a system of responsible investment through private accounts, such as Chile where the average real return on personal accounts since the program's inception in 1981 has been 10 percent a year.
Now, if only CCL will finance a trip to Patagonia this weekend so I can learn more.