In 2003 José Piñera, President of the International Center for Pension Reform and Distinguished Senior Fellow of the Cato Institute, gave this conference warning the upcoming crisis of the west. For more information about José Piñera’s ideas and Pension Reform visit http://www.josepinera.com or http://www.pensionreform.org
Social Security Series Part 6
Max Brantley on his Arkansas Times blog on Sept 3, 2010 wrote concerning Social Security privatization efforts, “Allowing such individual investment decisions would be the doom of the system as we know it and those who favor the approach know it full well.”
I would counter Mr. Brantley with two pieces of information. First, the path we are on is unsustainable. The video clip rightly points out that the unfunded liabilities of “pay as you go state run pension systems are enormous” and they are “a time bomb” as José Piñera notes in the above video in 2003. He said of Europe: “I am astonished that the political leadership of Europe does not understand the seriousness of this threat. It is a time bomb. The unfunded liabilities of the pay as you go state run pension systems are enormous.”
Basically the USA will be where PIIGGS is today. Portugal, Ireland, Italy, Greece, Great Britain, and Spain are guilty of following down the path of socialism that we are going down. The only difference is that we are about 10 years behind them. Similar results can be expected in the USA that they have now. This forecast of José Piñera was given in 2003.
Second, Proponents of Social Security privatization can cite examples of other countries all over the world privatizing their social security systems and can report much success.
Australia began to implement personal accounts back in the mid-1980s, and the results have been remarkable. The government’s finances are stronger. National saving has increased. But most important, people now can look forward to a safer and more secure retirement. Another great example is Chile, which set up personal accounts in the early 1980s. This interview with Jose Pinera, who designed the Chilean system, is a great summary of why personal accounts are necessary. All told, about 30 nations around the world have set up some form of personal accounts. Even Sweden, which the left usually wants to mimic, has partially privatized its Social Security system.
José Piñera in 2003 part 2