Subject: RE: Some reactions to a few of the comments
>Contributor: PANELIST: Robert D. Reischauer
>>>>"How does this square with the horrendous tales you have heard about Social Security's miserable - about 1 percent for future cohorts - rate of return? What is often left out of the paeans for private accounts is the unfunded obligation the nation has to current retirees and those approaching retirement who could not hope to accumulate sufficient balances in a private account to support an adequate pension...... If payroll taxes are diverted into private accounts, the nation will have to come up with other resources to meet its obligation to retirees and these taxes similarly will have a rate of return of minus 100 percent. Anyone who wants to compare the return provided by the current system with that of a *new and improved* system has to calculate a weighted average of the return on the assets held by the new system and the minus 100 percent return on the contributions made to meet the unfunded liability
for current retirees."
Excellent post. I hope you are more successful at getting them to discuss that issue than I have been. Somehow, those CATO-type comparison calculators forget some of these 'minor' issues, and leave many with the wrong impression about true comparisons.
