May 2, 2012
There are two serious problems with America’s Social Security system. Almost everyone knows about the first problem, which is that the system is bankrupt, with huge unfunded liabilities of about $30 trillion.
The other crisis is that the system gives workers a lousy level of retirement income compared to the amount of taxes they pay during their working years. Younger workers are particularly disadvantaged, as are African-Americans because of lower life expectancy.
These are critical issues, but perhaps looking at a couple of charts is the best way to illustrate why the Social Security system is inadequate.
Let’s start by looking at some numbers from Australia, where workers set aside 9 percent of their income in personal retirement accounts.
This system, which was made universal by the Labor Party beginning in the 1980s, has turned every Australian worker into a capitalist and generated private wealth of nearly 100…
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