Skip to comments.Friedman's 'heresy' hits mainstream Private Social Security accounts were his idea
Posted on 09/12/2005 10:43:18 AM PDT by george76
San Francisco seems an unlikely home for the man who in 1962 first proposed the privatization of Social Security.
Asked why he dwells in liberalism's den, Milton Friedman, 92, the Nobel laureate economist and father of modern conservatism, didn't skip a beat.
"Not much competition here," he quipped.
Friedman is considered perhaps the most influential economist...
It was Friedman who in 1962, with the publication of "Capitalism and Freedom," first proposed the abolition of Social Security, not because it was going bankrupt, but because he considered it immoral.
Friedman calls Social Security, created by President Franklin Roosevelt in 1935, a Ponzi game.
Charles Ponzi was the 1920s Boston swindler who collected money from "investors" to whom he paid out large "profits" from the proceeds of later investors. The scheme inevitably collapses when there are not enough new entrants to pay earlier ones.
That Social Security operates on a similar basis is not really in dispute.
The biggest misconception about the program, he argues, is that workers believe it works like insurance, with the government depositing taxes in a trust fund.
"I've always thought it disgraceful that the government should be essentially lying about what it was doing," he said.
He calls himself an innate optimist, despite the unpopularity of many of his ideas.
When he moved to San Francisco in the 1970s, the city was debating rent control, he recalled. So he wrote a letter to The Chronicle saying, "Anybody who has examined the evidence about the effects of rent control, and still votes for it, is either a knave or a fool."
What happened? "They immediately passed it," he laughed.
(Excerpt) Read more at sfgate.com ...
Freidman is really hit and miss with his logic.
The same reason was given by one of the estimated twenty-five heterosexual male inhabitants of the city.
"Everybody goes around talking about the problems created by the declining number of workers per retiree," he said. "How come life insurance companies aren't in any problem?"
The question is quintessential Friedman: simple, accessible and formidable.
Life insurance companies take premium payments and invest them in factories and buildings and other income-producing assets, Friedman said. These accumulate in a growing fund that can then pay benefits. Social Security, by contrast, operates pay-as-you-go, collecting payroll taxes from workers that immediately go to pay retirees.
Asked why, if Social Security is so terrible, it is the most popular government program in American history, Friedman replied, "Well, because why does a Ponzi game work? It's easy to understand why it's popular. So far, on the average, retirees have gotten more out of the system than they put into it. "
What about the fact that Social Security has reduced poverty among the elderly?
"Well," he replied, "what it has done is transfer a lot of income from the young to the old. It is certainly true it has made the old people of the United States the best treated old people in the world."
But why is that a bad thing? "Oh," he replied. "It's not a bad thing for them, but what about the young?"
It is welfare for the greediest generation...
Where does he miss?
Don't get me wrong, I like the accounts idea. But he was on board with criticising Bush a coupla days ago in the paper.
Milton Friedman ping
"Anybody who has examined the evidence about the effects of rent control, and still votes for it, is either a knave or a fool."
Have you ever see Bay area women?...DOG CITY woof woof!... they all seem to have that hard core femnazi look
The dude is 92 and senile.
His ivory tower rants are out of synch with current economic conditions.
It would be better if he retired and let younger, more agile minds do the hard thinking.
The poor guy just can't keep up anymore.
Do you have some point of objective disagreement with Dr. Friedman, or should we all be compelled by your feeeeelings into not liking him ourselves?
I wish he could live to be 190. He is the brightest human being on earth.
One of the greatest economists of our time. If he'd done nothing besides training Thomas Sowell, he would *still* have been great :-).
Good to see that the dear old gent is still kicking!
Something we can agree on. My college roomate got his PhD under Friedman and is now department chairman at Rutgers.
The first book assigned to me in freshman economics was Capitalism and Freedom.
Do any examples come to m ind?
I dare say that Milton Friedman's powers of logic are about six sigma higher than the mean Freeper's.
He has an unfair advantage - he's not pregnant!
"The dude is 92 and senile."
At 92, he still can out-think and out-debate anyone who is foolish enough to take him on.
You are just mad because he shops at Wal-Mart.
Did you see this?
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