SS puts 100% in treasuries. How do you figure putting 30% in stocks triples your return.
Fine, Social Security puts 100% in Treasuries and I'll get less than 2% return. Someone born in the 1970's will get a zero return and any one born later than 1980's will get a negative return.
My post (26) said :
By comparison, the real yield on a 30-year inflation-indexed Treasury Bond in todays Wall Street Journal was 2.729%.
So, even if I put 100% in TIPS I earn more than 36% more than I'd get from Social Security. (2.729% vs less than 2%)
Your post 33 said this :
The very purpose of the system (whether you agree with it or not) is to transfer funds, inter-generationally, from workers to retirees. It is not now, nor has it ever been intended to be a plan for current workers to provide for their own retirement.
I still think you're wrong as far as the original purpose of Social Security. The only way to achieve the purpose was to transfer from the next generation. Now I think we can self fund our retirements more efficiently.
My question about risk was to see if you understood risk/return. Most people don't. We both do.
We both know how TIPS work, fine. As far as risk reward goes, zero risk TIPS would be better, for someone my age or younger, than Social Security. We both know that stocks are much riskier than TIPS and would (over a long enough time frame) give a much higher real rate of return than TIPS. Maybe the ratio needed to triple Social Security is 60/40 or 50/50 instead of my original 70/30 comment. Maybe I exaggerated slightly.
I maintain that those who argue for private accounts fail to understand the purpose of social security (which I describe as a program to transfer income from youthful producers to formerly productive non-producers). You introduced the following quote from FDR, apparently, interpreting it to support your vision of the reason for social security (a program to assist people to provide for their own retirement):
The civilization of the past 100 years with it's startling industrial changes has tended more and more to make life insecure. Young people have come to wonder what would be their lot when they came to old age. ... We have tried to frame a law which will give some measure of protection to the average citizen and to his family against the loss of a job and against poverty stricken old age.
This quote, by itself, neither supports your view or mine on the purpose of SS. However, the actual operation of the system to date has NOT been to provide some rate of return to people's investment. NO EFFORT, WHATSOEVER, connects contributions to benefits. This, clearly, supports my view that SS is an intergenerational transfer. Therefore, the concept of privitizing makes no sense whatsoever.