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Cato Institute Senior Fellow Michael Tanner on the future of Social Security and whether private investments are a safe alternative.
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Well do you think Social Security's going to be there when you retire well according to the -- -- -- -- could be happy that pot to be -- -- about 24 years if not sooner or my next guest says there's absolutely no way to say that the way we're going right now but.
Michael Anderson a fellow fellow at this Cato Institute may have some new ideas Michael -- You know I've recently read worthy the fun is going to be bone -- by 22 -- and its but it put out one point six trillion and have a three billion dollar deficit either way we know it's gonna be bone dry.
And there could be solutions right.
Well -- security is running a cash flow deficit today its spending more on benefits that is taking in through taxes.
And it's basically kept afloat because of interest payments that are made in the form of government bonds.
But it anyway you look at it for today's thirty year old.
-- security will not be able to pay the promised level of benefits basically if you're thirty years old out there are only gonna get about 75 cents on the dollar.
Well Michael I want to talk about your report villiers study because the idea of just printing up money to pay this out of ridiculous it.
I might get to grant a Social Security but it cost me 300 bucks for a local bread it kind of defeats the purpose how about a new or different solution.
Well of course we've talked -- a long time about the idea of letting younger workers take a part of their Social Security taxes and invest that privately.
A lot of people got scared of that because of the market volatility recently we -- the market go down a lot bowl of recent years and people said.
-- see if you've invested privately you -- lost all your money.
Well we decided to look into that and see what exactly would have happened if someone had been investing over the last forty years.
Instead of relying -- security and it turns out.
They would have been better off with private investment.
Well you know I'd I'd I'd talk about that a lot of people.
And it just really blows me away people who rail against the rich and I think well.
Son picked up a cover pick up of Forbes magazine a look at these 400 people about 370 of emirates because there and the stock market but you don't wanna go that route.
How how we convince the average person out there that this might be the only way in the smartest way to make this thing to keep it solvent.
While -- is -- fact is that you face three choices result security -- more money going out that you have coming in.
You can cut back on the amount going out which means cutting benefits you can increase the amount coming in which means raising taxes and -- have to.
Have about a 50% increase in the payroll tax to keep the system solvent.
Or you can make better use of the money you already have in the system by investing it in something that -- -- real rate of return.
And the fact is that even -- all the ups and downs of the market recently.
Over a long period of time the remark the markets a private remarkably safe and they yield a positive rate of return.
And people would be better off in private investment.
-- I'll take door three for all the marbles -- and we got a minute left.
You are your thoughts on this budget done anything in there that we should be excited about anything pro growth pro probe capitalism.
While this budget even by the standards of Washington where budget chicanery is an art form this is -- the most remarkably dishonest budgets we've ever seen.
The president talks about two and a half trillion dollars of cuts and there there are almost no real cuts he takes credit for a trillion dollars in cuts that were made last year.
It saves another trillion dollars by not invading Iraq and Afghanistan in ten years.
Any State's 500 billion in interest payments by not doing either the previous two things that's just plain dishonest anyway you look at -- Although -- might make for one heck of a campaign posted thanks a lot Michael Tanner from the Cato Institute we appreciated usual.
And it that current and still ahead.
