Take a look at what Sweden did in the late 1990s. They were way ahead of us in terms of being behind the curve. And since it’s a socialist state, they were also [in worse shape] than us. They finally ran into a huge crisis; mortgage rates went to 500% for a short period, and the whole system was coming apart at the seams. A new government came in, and Sweden revamped its whole system from a defined-benefits program to a defined-contribution program, like a 401(k), which by definition is self-financing. Now, Sweden has a productivity growth rate of 1.3% annualized over the past five years—not great, but better [than many other countries.] We need to change the structure of all the various social programs that have a trust fund to them and go to a defined contribution rather than defined benefit.
Does our system need to come apart at the seams for action?
Of course! That’s what the danger is. You don’t see these crises arising until it’s at your doorstep.
Sweden is a tiny country with a very different political system. How can its changes work here?
If you want to argue that Sweden can act faster than we can, I have no idea if that will be the case because Sweden behaves in a somewhat more rational way than we do most of the time. But that is a valid concern. Truth of matter is that the numbers will be whatever they are. Remember how I told you about the actuaries saying Social Security needed a 25% cut? The way they publicly handle the benefit calculation currently is that they say the trust fund won’t run out for another X years—as though that is saying it’s terrific! It ain’t. The reason the true actuarial balance isn’t demonstrated is because it’s politically incorrect to do so. But they are basically saying, “We don’t have the capability of maintaining the defined-benefit system.”
Why didn’t he bring up his concerns during Obama’s reign?
GW was always promoting the idea of a 401k-type of SS retirement, and could never get anyone to listen. So yes, the system would have to collapse for it go get fixed, I think.
Unless Trump takes it on. He is the only one I know with the backbone to push it through. To do it, though, he needs a second term.
All they are discovering is that savings in an interest bearing account accrues a lot over enough time.
Forcing people to save a la Singapore leads to net equity, not a debt owed by a new generation.
Woopee. Sweden is not a model for anything except disasters caused by the idiots who refer to themselves as “the state”.
Says the architect of the 2006-08 housing crisis and the wizard of the Y2K liquidity pump and dump.
Sweden also has school choice
oh Lord. please rid us of this abominable bank. we need another great one like Andy Jackson.
almost two decades he was top dog.. which made Andrea the Head Bi.. uhhhh Pooch..
How well they did during that run indeed.. many others , not so.. but hey, what’s a little rewrite of history, huh?
Sweden does not exist anymore. They are just waiting for of their graves to be dug so they can lay down and be beheaded or shot if they are lucky and don’t cause trouble for their Muslim masters, so anyone who says Sweden got ANYTHING right is a fool.
Alan, shut up and go home to Andrea Mitchell.
“Medicare”
Key is to make hospital costs 25% less.
This can be done by eliminating the EMTALA, converting hospitals into real estate investments trusts leasing space at commercial rates ($15-$30/sq.ft./year) and not $4,000/hour/operating room.
Prior to the Social Security system the preferred 20th Century retirement investment was the duplex house - live on the first floor and rent out the second floor.
Block busting in the 1960’s led the duplex to be outlawed for new construction.
.
Don’t let the left twist reality!
Social Security is no “entitlement program!”
Its a tabled earned payout anuity plan funded from outside government.
.
To reduce the need for retirement income, school taxation might be ended at age 65.
Instead of paying high FICA taxes, FICA taxes would be low but school tuition might be charged after the sixth grade.
now
worker$$->SS->retiree->school system
future
worker$->SS->retiree
worker$->school system
Public school education costs about $12,000 to $21,000 per year per student.
Junior and the Little Princess are going to be asked to pay that back via FICA taxation.
The largest expense for tens of millions in retirement years is K-12 school taxation.
mortgage rates went to 500% for a short period
I wonder how many people took out that mortgage?
Can we avoid a debilitating era of financial disruption and crisis? Our best hope is to outgrow our massive debt and deficit through a wave of technological innovation, economic growth, and wealth creation. We are unusually fortunate in now having an energetic and determined President who knows this and the policy changes necessary. MAGA baby, full steam ahead.
Can we avoid a debilitating era of financial disruption and crisis? Our best hope is to outgrow our massive debt and deficit through a wave of technological innovation, economic growth, and wealth creation. We are unusually fortunate in now having an energetic and determined President who knows this and the policy changes necessary. MAGA baby, full steam ahead.