Social Security's Coming Crash: The Certain End of Entitlement | Doug Bandow | Cato Institute: Commentary

Social Security's Coming Crash: The Certain End of Entitlement | Doug Bandow | Cato Institute: Commentary: "U.S. GDP is about $14 trillion. One year of economic output already is committed to paying off the national debt, which is now above $12 trillion and climbing fast."

"Finally, there are Social Security and Medicare. Together, they have about $107 trillion in 'unfunded liabilities.' In real-people-speak, that is the difference between promised benefits and expected revenues. That amounts to about eight years of America's economic production and twice the world's annual GDP."

"Even before last fall's financial crash, then-comptroller general David M. Walker warned, 'The only thing the United States is able to do a little after 2040 is pay interest on massive and growing federal debt. The model blows up in the mid-2040s.'"

"Last fall's stock-market collapse demonstrates that private markets offer no guarantees. But that uncertainty should be contrasted with the certain bad deal from the federal government. Moreover, the return on private investment has remained well above the levels for Social Security even when measured against major stock-market downturns. The rate of return was over three percent annually, handily beating Social Security's return these days, for even the worst 20-year period in American history, which encompasses the Great Depression."