The cruel irony of it all is that we only recently discovered Social Security’s trust fund will run out by 2032, according to the latest Trustees Report.
The system, designed as a Ponzi scheme requiring more young workers paying in than retirees collecting benefits, has collapsed due to an aging population. Currently, roughly 11,000 Americans retire daily (the baby boomers), while only about 8,000 enter the workforce each day, thanks to declining birth rates.
This imbalance has deepened the government’s red ink every year, leaving Social Security unable to pay its promised meager benefits.
If Congress had adopted a personal accounts reform proposed by Steve Forbes in 1996 and implemented by President George W. Bush in 2005, people nearing retirement age today, like Stephen Moore at 66 years old, would have accumulated approximately $1.5 million each. This could have provided monthly benefits three times higher than Social Security currently offers.
Stocks and bonds have grown by 725% over the past two decades (including reinvestment of dividends), meaning every American worker with a personal account would now be a pension millionaire. Even a lifetime minimum-wage worker, investing consistently, would have accumulated significant wealth.
The left wing and certain interest groups, including AARP, blocked this reform for years, costing workers millions in lost retirement savings.
Now, the government seeks to raise taxes on young workers and cut benefits to cover its own mismanagement.
While it’s too late for Stephen Moore’s generation, millennials and Gen Z can still demand a better deal by tapping into the power of compound interest.
Stephen Moore is a former Trump senior economic adviser and cofounder of Unleash Prosperity, which advocates for education freedom for all children.
