José Piñera discusses privatizing social security on FBN

[Virtuoso80]

OR, Chile: The free-market miracle, that, despite the unfortunate but unrelated crimes of it's dictator, demonstrates how unfettered trade and privatized industry can suck power away from a dictatorial ruler, ultimately leading to a free, and prosperous state.

...perhaps the truth is somewhere in between.

[Virtuoso80]

Chile: Where everything was beautiful and rosy under Allende until the CIA and wealthy multinationals conspired to overthrow him, give power to a murderous, oppressive dictator who tortured and massacred his people, and sell of all of Chile's public assets to foreign interests who made a killing, while the Chilean people suffered under massive depression and unemployment.

[gonzalo060375]

I'm not endorsing Jose Piñera's ideas or the Chilean model as a rock solid truth, but the facts are, the AFPs are making up to 70% of Chile's PIB, funding entrepreneurship and industrial grouth.

Being an AFP user, I can choose among a number of competing AFPs (retirement fund mgmt. offices), whose results are publicly available, and my savings are growing by an avg. 10% since 7 years.

If there was a better way, I'd be the first in line. Meanwhile, this seems to work for me.

[koprolaliko]

This guy is the Osama Bin Laden of Economy.

In Chile this pervert system has been used as a wash machine of private debt.

The banks in collusion with Funds Administrators (AFP) and stock changers have utilized the system ad infinitum fucking the contributors (savers) and earning billions with the fraud.

You can not trust your future in private hands.

Please see the whole picture (last 30 years) and not only 6 months.

Be carefull or your elderly will be very sad.

Look for Thomas Jefferson & banks

[diasslo]

@koprolaliko Are you kidding me? Now we are the richest country in Latin America

[skolic08]

Americans! You need change to a Social Security like Chile. Your national debt is extremely high and this situation is very dangerous for your nation.

Don't believe opinions of some socialist Chileans that don't rely in freedom. Our Social Security system has worked well and has been "exported" to 30 countries!

[jmarraztoa]

Hello, I'm chilean and I want to give you my experience. Since december 2008 I've been following how my money for my pension has been growing, and it has been 14.9% annual above inflation. I hope this information help you, if anyone wants more information, please be free to write me at jma@vtr.net (please be serious and don't spam me)

[2010pedroreyes]

Gonzalistico: Our pension system can be good for the companies doing bussines with the money. You should ask the people who get retired with a miserable pension.

[ppcuevas]

Tremendo grande don PEPE

[marjorietking008]

EXCELLENT AS HE SPEAKS THE TRUTH ABOUT OUR ECONOMY!

[Champraves311]

The spam button is not meant to silence those who oppose your political views. It is meant to silence unwanted spam. Don't abuse it.

[pepetv1000]

if you think what is happening in Greece at the moment, I think he is right. In Chile the system works.

[tomtom95678]

All lies

[MrReco12]

why does the Cato institute give time to this disgusting piece of human trash?

A man who supported a brutal fascist dictator and profiteered out of the suffering of others. Its like interviewing Albert Krupp!

A coup that was responsible for the death of 3000 of his countrymen and the torture of 30 000!

RIP

Nadia del Carmen FUENTES CONCHA, 13,

Francisco Antonio Fuenzalida Morales, 12,

JAIME ANDRES CACERES MORALES, 11

This man should be thrown into the nearest prison.

[RSG132]

@MrReco12

On December 2, 1981, the day after approval of the Mining Law, Piñera resigned in order to restart his opinion magazine Economia y Sociedad, which was dedicated to fight for the transition to a democratic system and the consolidation of the free-market economy. In those years, still under the military regime, Piñera wrote seventy articles in the press in defense of human rights and democracy.

[MrReco12]

@RSG132

LOL, he applauded the destruction of democracy in the first place. Thank you for confirming his hypocrisy!

[MrReco12]

@RSG132

He also compared the murderous PInochet coup to the "American revolution". I hope he gets what he deserves.

RIP VICTOR JARA: A innocent victim of Pinera' Nazi right wing ideology!

[quequekiller]

here in chile the system sucks! all this crap about of the money in the isapres is in safe is a lie....the reform pension is awful and only to give money to the rich.....come to my country to see alive this

[keiv2004]

@quequekiller That's not true. 9% annual return (real) for 30 years. That's a fact.

[poindexterwitkowsky]

~~Stand up 4 your RIGHTS Americans* +The REPUBLICANS have been FOOLING YOU for the last 30 yrs. SOCIAL SECURITY*, (SS) , is NOT entitlement! SS HAS A $2.6 TRILLION SURPLUS. SS CAN pay every claim at least until 2030. SS DOES NOT increase the federal budget by one cent! Tell the REPUBLICAN GANGSTERS & THEIR WALLSTREET BANDIT FRIENDS that you will FIGHT any PRIVATIZATION*OF your SS pension. You will FIGHT ANY REDUCTION IN BENEFITS. YOU will FIGHT any change in AGE REQUIREMENT FOR SS BENEFITS!

[Wraith23]

Privatization of the pension system was inevitable the old state controlled system was already in crisis since the 50s

[PanzerDivisionBOM]

Heh, right. Because selling off the program to favoured interests will somehow make trillions of dollars turn up to cover its debts. What it WILL do, is to give the bureaucrats who taxed and spent that money in the name of die Gemeinnütz an easy out: "It worked just fine until after we sold it off, so it's not our fault."

-

[PanzerDivisionBOM]

-

Maybe some reform could have saved social security, back when the debt wasn't insurmountable. But at this point, one generation of dependents will just be SOL when the money runs out, and the sooner the bureaucrats acknowledge this, the sooner people can cut their losses and save privately for retirement.

[Donovan4Senate]

He leaves out the fact that people in both Chile AND the US are being forced into paying for these government plans. Some of these guys sound like "free" market types, but force is the tool they use. The Chileans just use it a little smarter than we are using it in out Ponzi Scheme aka Social Security.

[bonfirejovi]

Social security is something I wouldn't privatise as we don't live in a free market and therefore the risks are too great. People's wealth will depend on reckless on central bank policies and consequences of easy money policies.

[bonfirejovi]

@gonzalistico He is a typical Naomi Klein worshipping idiot who has read one book in his life (Shock Doctrine) and thinks that Pinochet is still dictator of Chile. His stupidity is common in the US.

[raderator]

White people thought they could abort all their children and replace them with Mexicans and things would work out. LOL

[raderator]

Why don't you Chilean idiots have more respect for the man who saved your country, Pinochet? Only his wise rule allowed Pinera to work his magic. There is absolutely no doubt it would never have happed had you hot-headed people been allowed to vote on it.

[bonfirejovi]

@raderator Because the guy killed over 3000 people, just because he had good economic policies doesn't excuse his tyranny.

[FFAlexanderHamilton]

Watched this interview again.

Extraordinary, brilliant and courageous vision about the approaching fiscal debacle of the US and Europe and the sovereign debt crisis.

Everyone interested in the future of the world economy should watch this video.

Congratulations señor Jose Pinera.

You are a true benefactor of Humanity.

[apango2000]

@FFAlexanderHamilton

"Benefactors of Humanity" do not align themselves with totalitarian dictators who torture and murder their critics and opponents.

[FFAlexanderHamilton]

@apango2000 To me Mr. Jose Pinera is a "Benefactor of Humanity" because he is sharing all around the world, with extraordinary eloquence and courage, a true solution to the hugely important pension crisis. Your views on President Pinochet are an entire different matter, so please show us some respect and do not try to change the focus of this debate nor use such inflammatory language. Thanks.

[apango2000]

@FFAlexanderHamilton

Oh and by the way, Pinochet was not a "President", he was a murderous, brutal and corrupt dictator too coward to face justice escaping from it by pretending to be demented.

Don't let that ridiculous "president" tilte slip out of your mouth and ruin any shred of credibility you might have left.

[gabriel7s]

@FFAlexanderHamilton jajajajaja

[tarres44]

Gringos este es un verdadero payaso.

[yanezds]

@tarres44 jajajjaaaaaaaaa you couldn't have said it better... no podriai haberlo dicho mejor

[liberdadero]

Mr. José Piñera is part of the libertarian team of economists and experts that recovered their country from the Allende's criminal attempt to turn Chile into another Cuba. From the ashes and leveraging individual freedom before political power and government their work shaped the most successful response to socialism and underdevelopment.

[apango2000]

@liberdadero

Is it "libertarian" to impose economic reforms against the will of the people?

Was Piñera an "expert economist" when he was appointed to head a minister for which he had zero experience?

Was Chile "rescued" to become Cuba by plunging the country in a bloodbath?

If Piñera's and Pinochet's "successful response" was so successful how come both of them were massively rejected by Chileans in the first opportunity we had to voice our opinion?

[bonfirejovi]

@apango2000 Because they were murderous bastards. Their economic policies however were retained because they were a success. Example, compare modern Chile to modern Venezuela.

[Wraith23]

@apango2000

At least the chilean had the opportunity........ the cubans are still waiting for an election....... some day.

[MrReco12]

@liberdadero

Lies.

[FFAlexanderHamilton]

A most extraordinary, brilliant and courageous vision about the approaching fiscal debacle of the US and Europe.

Everyone interested in the future of the world economy should watch this video.

Congratulations señor Jose Pinera. You are a true benefactor of Humanity.

[apango2000]

@FFAlexanderHamilton

True benefactor of humanity?

You really have to be kidding me

A man who knowingly and willingly served under a murderous tyrant who routinely had his critics tortured and assassinated can hardly be called a benefactor.

[kurapict]

chicago boy culiao,

el pensionado en chile es una mierda , uno trabaja toda su vida para recibir luego una miseria de plata.

privatizo junto con otros la mayoria de weas en el pais .

hijo de puta al igual que friedman

[stewy357]

I can't wait for the system to collapse. I'm almost giddy at becoming a warlord :) lol

America is in for another reality check. Few will be ready when SHTF and America goes full third world.

Going to be very interesting.

[liberdadero]

@stewy357 We Chileans love America and what it used to represent for all of us: freedom and self reliability. And strongly believe that you will find the way out of this dark days. May God bless you all.

[apango2000]

One of the many false claims, (repeated by one of his brainless minions) is that this hoax has given workers 9% return every year.

Aside from the fact that this figure is cooked, he fails to mention that such a figure does not take commissions into account.

So if you "invests" 100 dollars, up to 25 are discounted in commissions and 75 are invested. So even if the 9% was true at the end of the year his 100 dollars would be worth 75 + 9% = 81.75

What a deal!!!!

[apango2000]

And that is not all. One of the largest and most prestigious investment firms in Chile (CB Capitales) has repeatedly accused the administrators of the pension system in Chile of cooking the numbers and overstating earnings. Their accountants have calculated the real return of the pension system and concluded that a person would be better off simply parking their savings in a federally insured bank savings account.

Jack Abramoff would die of envy if he knew these guys!!!

[JessicaBelle81]

Sounds like a better idea however it would be better to abolish Social Security all together.

A Gov't that forces somone to do something with their own property that that individual doesn't want to do with it, then technically the Gov't isn't protecting property rights.

[apango2000]

@JessicaBelle81

How is forcing people to pay commissions of up to 25% to private investment firms a "better idea"???

I could respect a true libertarian opposing any kind of government intrusion, but for Piñera and his fake libertarian Cato Institute its OK for government to force you to hand over your money (as well as to torture and murder you) as long as the pockets you are lining are private.

[JessicaBelle81]

@apango2000

I simply said that it would be better having individuals have more ownership over their funds than the Government.

I think I made it clear though that I take the same position as you.

[TomasAnderson100]

The average rate of return of the pension funds, over 29 years, has been 9,23% a year, on top of inflation. Yes: a real rate of return to workers of 9,23% a year (plus inflation).

You can find that eloquent number in the Table titled "Rentabilidad Real del Fondo Tipo C-Internedio" . See the last column: "Promedio anual Junio 1981-Febrero 2010" (the return is in UF, the inflation-indexed unit of account in Chile)

[TomasAnderson100]

It took the private pension system less than a year after the Lehman crisis to recuperate all the losses from the financial crisis. During the crisis, the system was strongly defended not only by the Treasury Secretary, señor Andrés Velasco (a Harvard Ph.D.), but also by President Bachelet.

[TomasAnderson100]

The new Undersecretary for Pensions. señor Augusto Iglesias, is one of the most prominent defenders of the system of personal accounts.

[TomasAnderson100]

The private pension system of Chile has been such a success that four center-left governments have not dared to change it. On the contrary, President Bachelet extended the personal accounts system to include the self-employed.

[apango2000]

And the most hilarious and sad thing about these deluded defenders of the "private accounts", is that they spend a great deal of their lives thinking they are actually "saving" for their retirement (when they are only lining the pockets of the pension administrators) and when they want to retire they find themselves only elegible for the minimum state mandated and funded pension benefit.

So much for a "private" system.

[apango2000]

One of the most "successful" aspects of the chilean pension system, is to keep people many people ignorant of this hoax (as can be seen from the comment below).

However their own president (representing the right wing of Chilean politics) admits the pension system is a failure, what else can one say.

[apango2000]

Now if you think that hoax is the best in the world it only goes to show how little you actually know.

The fact that you had to buy, eat and digest this bullshit doesnt mean that everyone else has to.

[apango2000]

Certainly the idiot here is not me, and I would argue that its you (dont worry you are not alone)

The opinion that I posted below is the opinion publicly expressed by your own president about the failed private pension system in Chile.

A president that happens to be the brother of the charlatan trying to sell this hoax to others.

What is the part of it that you can not understand?

[TomasAnderson100]

Apango2000 is a big time coward.

Paid probably by Chavez and using a fake (and idiotic) name, he makes ad hominem attacks on whoever defends free market ideas and policies.

Poor fellow, without a life and full of hate.

[apango2000]

How fitting

This is exactly how Jose Piñera operated in Chile

He would go around looking like Mother Theresa spreading his gospel pulling fake numbers and empty promises out of a hat..while his brainless henchmen would go around killing and threatening his critics and opponents.

Too bad in a democracy these wannabe henchmen happen to be nothing but a pair of toothless puppies afraid of their own shadow.

[TomasAnderson100]

emspeed1

It is evident the "agenda" of apango2000. To discredit the Chilean solution resorting to the big lies that are in the DNA of a neocommunist like him.

And he makes ad hominem attacks on Pinera without using his real name. What a miserable coward!

[gbertonati]

With the modifications implemented in 2008, in 2012 the system will give you a minimun of USD390 a month. Thats a lot of money if you think that in 2008 you was getting NOTHING, because you didn't save.

[PolicetheTube]

Apango2000

SHOW YOUR NAME, COWARD.

AND GET A LIFE

[apango2000]

Cato police in action!

Showing, one more time, that their libertarianism is nothing but facism with a facade

[emspeed1]

@apango2000

You really should pick up a dictionary and read the definition of Libertarianism, Fascism, Communism, and Statism. One of these ain't like the others (that would be Libertarianism), the other two fall under the category of the fourth. I am guessing you fall into the third camp, though I suspect you know the game is up if you let that slip, which is why nothing is shown on your page.

[TomasAnderson100]

Anyone who reads all the entries in this blog can verify that Apango2000/Manuel Riesco uses inflammatory language and makes ad hominem attacks to whoever disagrees with his opinions and with his big lies. The facts are all in this blog. Please check them. Since he is a big time coward, he does all this hidden behind such an idiotic name as "apango".

[TomasAnderson100]

Mr. Riesco (aka apango 2000), you are still a member of a party that killed 100.000.000 people (Source: "The Black Book on Communism"). The number of communist terrorists who died, regrettably, in the Chilean civil war were less than 2.000. And they initiated violence infatuated by the dictator Fidel Castro and his Cuban Revolution!

[TomasAnderson100]

Apango2000 (aka Manuel Riesco) evades an answer. As an economist, Riesco is a joke. As a communist, Riesco shares a responsability in the cold blooded murder of senator Jaime Guzman by the military branch of the Chilean Communist Party (Frente Manuel Rodriguez). This facts can be checked. The truth, even if it hurts!

[apango2000]

You seem to stick your foot in your own mouth.

If Riesco shares responsibility for the murder of Guzman, then by the same exact logic, Piñera shares responsibility for the thousands of people murdered and tortured by the dictatorship under which he served.

[apango2000]

And by the way, what do you call an attack on a person for what he believes rather than the issues he raises?.... I believe that is called Ad Hominem attack.

And what do you call a person who cries for the very thing he himself uses?...I believe you call him a damn hypocrite.

[TomasAnderson100]

Apango2000 must be a 2000% fully certified "idiota latinoamericano", as Vargas Llosa calls the neocomunists that adore Chavez and Fidel. He says that Manuel Riesco is "Chile's leading economist" (?????). Mr Riesco is a card-carrying Communist Party member (he runned for the Senate and got his vote and his wife's), who has dedicated his entire life to lie and discredit the Chilean private pension system, without any success. Not even President Bachelet heard him or appointed him to any position!

[apango2000]

Neither Chavez nor Fidel have a thing to do with the subject. It seems to me that you are incapable of debating rationaly so you resort to desperate and baseless attacks.

[FFAlexanderHamilton]

This is EXTRAORDINARY. Who is this brave man who tells us incomparable truths explained in incomparable language? I recommend this interview to every American and to every citizen of the West. Will find more. This is HUGE..

[apango2000]

If your definition of "brave" is some one who willingly puts himself at the service of a murderous totalitarian thug, you must really love Chemical Ali, and other "ministers" who served Hussein.

[glennd7962]

All you morons defending social security or arguing the finer points of forecasting are in for a rude awakening. Very soon, the entire ponzi scheme that the U.S. economy has become will come crashing down and such ideas as unlimited promises by govt to put a 'chicken in every pot' will be seen for what they are - the childish fantasies of collectivist-utopians who've never had to make a dollar of profit in a business in their lives. I hope you've enjoyed destroying the country. Fuck you all.

[papeluso]

This issue is why I believe George W. Bush was the greatest President of all time.

President Bush sought to take on this problem in the mid-2000s when the issue of Social Security reform was not popular and did not benefit him politically.

That's leadership people!

[chokin2]

hey pal, he didn't do jackshit on that regard, let me tell you.

[papeluso]

You are correct!

The Republicans and Democrats balked at the idea!

But he proposed the legislation!

[apango2000]

profwito if they do, they don't have to do it at infinitum and not using the great depression pessimistic growth projections that the SS uses. This is a ficticius liability towards people that don't even exist now or for hundreds of year. To present this as a present debt is compeltely bogus.

[emspeed1]

(1)

@apango2000

The figure provided by Mr. Pinera is located on the CBO website. Search "The Long-Term Budget Outlook". Two scenarios are given. Mr. Pinera is speaking of the less rosy scenario.

Under the better scenario, debt as a percentage of GDP will be approx. 75% by 2035.

Under the worse scenario, debt as a percentage of GDP willbe approx. 180% by 2035.

Hardly hundreds of years in the future.

[apango2000]

(1) Emspeed

You need to look into

2009 Trustees Report: Section II.D, Projections of Future Financial Status

And see the difference between 75 year projections and projection into infinity. They are not the same!!!!

[emspeed1]

OK, I see it. pretty useless number the "infinite horizon".

A quote from the report "Through the end of 2083, the combined funds have a present-value unfunded obligation of $5.3 trillion." This is for SS only.

Still, the problem, though overstated, remains.

I disagree that Pinera was implying that "we owe this money now" or that he lined his own pockets at the expense of others, the exchange was mutually beneficial, both parties have benefitted. (older people not-withstanding)

[apango2000]

c) Furthermore if you are going to assume the economic figures (growth, inflation, unemployment, etc) are going to be like what the SS trustees assume in their analysis to come up with the liability figures discussed above, then you have to make the same assumptions when comparing it to what the stock market is going to return. And there is no way you can have the stocks return a 4% or even a 1% with the depression like conditions assumed by the trustees for 75 or infinite number of years

[apango2000]

b) BTW I can not help but tell you your comparison is flawed.

The 1.25% return for SS is a net return.

The 20% is assessed on the total investment amount (not on the return) and discounted ahead of time.

So your comparison in reality should be:

SS 100+1.25% = 101.25

Chile Private 100-20%=80, 80+4% = 83.20

So yes, I would rather have more than less.

[emspeed1]

Here is a quote from a study by Estelle James, an actual, employed economist talking about Chilean private accounts "The private funds earned an average 10 percent return since their start, ensuring that typical workers who contributed since 1981 now collect about 85 percent of their final wage upon retirement. That's more than double the average 40 percent paid to full-career, middle-income Social Security recipients in the U.S." Your math is poor.

[apango2000]

@emspeed1

Quotes and more quotes. That you take out of context or simply do not understand

[apango2000]

a) Regarding Manuel Riescos paper, you asked a question, and I gave you the answer. Now you do not have time to hear the answer. Seems to me youve already made your mind and dont want to bother with facts.

[emspeed1]

You gave me your opinion not "the answer". I did not find Mr. Riesco's paper, and what little I did find regarding him is that he loves anything that looks like big government. Also "leading economist" seems a stretch and if he is anything like Krugman than he definitely has the stink of government backside all over his nose. I understand this is Youtube, but playing fast and loose with your "facts" is still ill advised.

[apango2000]

@emspeed1

You are entitled to your opinion, however you are not entitled to make up your own facts. Time after time I have corrected your statements (like your math below) providing you with the sources and you come back with more . As I said below you obviously made up your mind and you are fishing for quotes, wherever you can find them, to justify that.

[emspeed1]

@apango2000

You've not corrected my math at all. You stated your take on my math. Prove that the AFPs take 20-30% of contributions (as you said on the other Youtube video) before being invested. Everything I've read regarding this issue other than Krugman (who is an epic collectivist) and one piece shown on PBS (decidedly left) is for this system. You obviously have an agenda, I know not what it is, (though it stinks of big government) though many here seem to know you by another name.

[apango2000]

1) First you mistake SS trustees projections with those of the CBO, then you argue 75 years is the same as infinity and now you ask me that I prove to you the fact that the system that you claim to support charges commissions of 20% of more of every dollar invested and not your ridiculous idea that commissions are assessed to the profits only. This after I have given you the opinions of a Nobel Prize winning economist and the most prolific and knowledgeable Chilean economist on the subject.

[apango2000]

3) Needless to say I think I heard enough to convince me that you are supporting and arguing something you know little about it. You have clearly made up your mind and no fact will ever make you change it. This being the case there is simply no point in continuing debating.

Thanks for your answer and have a great day.

[emspeed1]

(2)

@apango2000

A quote from the CBO regarding the less promising scenario; "The alternative fiscal scenario represents one interpretation of what it would mean to continue todays underlying fiscal policy. This scenario deviates from CBOs baseline even during the next 10 years because it incorporates some policy changes that are widely expected to occur and that policymakers have regularly made in the past..."

[apango2000]

emspeed1 The figures used by Pinera come from the SS and Medicare trustees report, not the CBO.

The figures arrived at by the Trustes are extended to infinity.

The figures used by Pinera include both SS and Medicare and not only SS as the pundit from Fox news tries to portray

The figures used by the Trustees use very pessimistic economic projections for the future

The figure for SS alone, based on the above assumptions is only about 15% of the total.

[emspeed1]

@apango2000

Cut and pasted directly from the SS/Medicare Trustees 2009 Annual Report

Quote- "...the projected combined Social Security and Medicare deficits and statutory general fund revenues in 2083 equal 9.7 percent of GDP."

There are no projections past 2083. No hundreds of years that I found.

No figures on the trustee report came anywhere near 100 trillion as you are suggesting.

The Fox pundit says at 1:55 "CBO"

Where am I wrong?

Point me in the right direction please.

[AlbaGoBragh]

I'm just jumping into this debate between you apango and then jumping right back out.

When the host made that statement about the CBO he was asking a question. He said, "these numbers are coming from the CBO, right?"

Actually unfunded mandates are at 107.5 Trillion right now and that number comes from the Federal Reserve.

Okay, I'm out. Resume your debate.

[apango2000]

¿Federal Reserve?....Thats even worst, the Fed deals with monetary policy not with entitlement programs.

[AlbaGoBragh]

Yes, but they allocate to money for those entitlement programs to Congress.

They are the privately owned bank that lends Congress money. They do have an interest in where that money is being spent.

I am no fan of the Federal Reserve. Most of our founders wanted Congress to hold the money. The theory is that they would be more accountable to the people they represent. Our founders never met our current Congress before w/ an approval rating of 10%.

Anyway I'm stepping back out of the debate

[apango2000]

Albagobragh

¿The fed is a bank that lends money to the US government to pay for entitlement programs?

Boy..needless to say you are very confused.

[apango2000]

There is a very good reason why Piñera would never dare to debate a serious economist and would only talk to pundits like the ones at Fox News.

[apango2000]

The CBO and the Trustees (SS and Medicare) are totally different entities. Both part of the government but one is congressional, independent and non-partisan while the second one is a political appointment.

Notice that when the Fox pundit says, This is coming from the CBO correct Piñera fails to correct him and simply says it comes from the government

[apango2000]

Emspeeed1

You are mixing a lot of things, let me try to explain.

First of all Im not the one suggesting we have a 100 trillion debt, its Piñera who claims that nonsense at 01:05

[apango2000]

Piñeras numbers include not only SS (15 trillion) but also Medicare Parts A, B, and C (85 trillion combined) Notice that the Fox pundit insists on pensions and we need to privatize SS but says nothing about Medicare.

The 15 trillion for SS come from the 2009 Trustees report that reads Over the infinite horizon, the shortfall (unfunded obligation) is $15.1 trillion in present value in the section entitled Projections of Future Financial Status

[apango2000]

In summary. Economic projections over the long period of time (75 years) already require many assumptions and the assumptions made by the Trustees (economic growth, demographics, etc) are extremely pessimistic. If these projections are further extended into infinity, they become completely meaningless (although very useful for propagandists like Piñera).

[emspeed1]

@apango2000

Ok, thank you for pointing out where to find this info.

(1) As I understood it, Pinera was using the Trustees middle ground estimate in which SS goes bankrupt in 2038, not their more optimistic or pessimistic alternative scenarios. This middle ground view ties fairly nicely with when the CBO says it will be bankrupt, and as you pointed out, the CBO is supposed to be non-partisan and therefore (I guess) trustworthy.

[emspeed1]

@apango2000

(4) It seems Pinera went with the Trustees actual estimate Alt 2, not Alt 1 or Alt 3. So accusing him of being a propagandist seems strange considering that he works for a Libertarian think tank and is most certainly not schilling for the Government, and yet was willing to use their numbers. I suspect he chose to use those figures because the average American wont wake up unless you really shock them, and though that may be sensationalism it is not necessarily propagandist.

[apango2000]

(4) In any case, if I can not convince you that using economic factors never seen since the great depression and assuming these will exist forever into infinity is not over pessimistic then I guess I wont be able to convince you of anything.

Im traveling overseas so sorry but I wont answer any more of your replays

Have a nice day.

[emspeed1]

(3) I agree that forecasting requires many assumptions, but to say that they are overly pessimistic seems a stretch, especially since Government projections rarely if ever seem to cover actual costs. They gave quite a wide spread (Alt 1/3) and based their guess (Alt 2) on what appears to be current trends. It is strange to me that the CBOs 100 Trillion deficit figure for the whole government is over the same time span that SS and Medicare Trustees say that they will be 100 Trillion in the hole.

[apango2000]

(3) Read Krugmans article Buying into Failure and Manuel Riesco (Chiles leading economist) 25 Years Reveals Myths of Privatized Federal Pensions in Chile.

[emspeed1]

Don't have time for Mr. Riesco's writings, but here is just one problem with Krugman's.

He claims 1% overhead for SS and around 20% for private. ROI for SS is about 1.25% the stock market is around 4% both inflation adjusted.

So, suppose a $100 investment in each, it would look like this:

SS 100+1.25%=101.25-1%of return=101.24

Private 100+4%=104-20%of return=103.20

Which would you rather have?

There are some other rather large issues but I too am time constrained. Safe travels.

[emspeed1]

@apango2000

(2) Also, it needs to be pointed out that though they say infinite time horizon, the actual projections go to 2083, which is where the SS Trustees say the U.S. will be 15.1 Trillion short. So we are not talking hundreds of years in the future but within the lifetime of my children. But lets leave that aside and for arguments sake say that the CBO and Trustees are right about SS being bankrupt by 2038. When should this be discussed and using what numbers?

[apango2000]

(2) What the Trustees are doing is making worst case projections into infinity to determine the most drastic reforms that would be needed to guarantee the preservation of SS and Medicare permanently.

What Piñera is doing is using these fictitious figures to claim that were already broke and we owe this money now to try to sell the same plan that lined his own pocket (and that of his friends and brother) and in turn ruined Chiles pension system.

[apango2000]

$100 trillion?

None sense

What this guy is doing is adding the pension and medical benefits of future generations and assuming we already owe this money.

Like adding the cost of feeding and raising a whole family for its entire life and telling a newlywed couple that this is their present unfunded liability.

Not even used car salesmen are so dishonest.

[yytrert]

how far ahead is he counting? and who did the number crunching, I can't find a source for any of this

[Praetonia]

Excellent video. It is a crying shame it only has 320 views.

[credible2]

all welfare has to be abolished

[fractalbuddha]

All that ranting over a "piece of paper from the government"?

Anyone find a source for this $100 trillion?

[LeGioNoFZioN]

thank you for sharing Cato, I thoroughly enjoyed this discussion.

[XCritonX]

Greedy baby-boomers have sold their kids into slavery to debt. So much for the "Great Society".

"Prisoners of Bismark", I love that. Its so true. That is why liberals should never be in charge of other peoples money.

[throwntomato]

5 stars! very informative video! thanks for the post. cheers.

[BryanShotYou]

Thanks for the video.

[TimeWarp66]

5:00

[capitalist4life]

I've read that Milton Friedman is pretty popular in Chile.

[CountArtha]

Not from Naomi Klein, I hope. :P

[TimeWarp66]

@capitalist4life

He is.

[Pvtjamesryan2]

Social Security can not be repaired.

[return135]

Privatize everything!

[ForTehNguyen]

youre already getting screwed on SS because they underrate the true inflation and SS payments are supposed to scale with inflation

[Wormtail81]

Who says we should have social security? Shouldn't people just save money for themselves? Oh, that's right...."social justice"....income redistribution....how silly of me to forget.

[whoo689]

My question for Jose is, how do future retirees who do decide to use these private accounts isntead of regular SS protect themselves from financial collapses like in 2008?? We certainly don't want people's entire savings to go down the toilet just b/c Wall Street fucked up. And I'm all for privatization, but there's always that risk, rare as it may be.

[Wormtail81]

Like he said, in the long term, the private economy will be a better place to put your money than simply trusting the government.

[ronpaul101789]

Isn't it sad that those who fucked up are still in business, thanks the United States government.

[mashed107]

If we were in a free market, and did not have a central bank artificially setting interest rates, the interest rates would be near 10%~ anyways. If someone is averse to risk, they could take the 10% interest compounded yearly and do away with risky stocks. They would definetely accumulate a lot of wealth over the 60 years, and banks would be a whole lot more solvent too.

[17Spartacus76]

Your comment presumes that the government can actually protect you from financial collapses

It can't, and it almost certainly is the cause of most of them.

[Gyrode]

If the government were honest about supplementing retirement, it would give tax benefits to people to buy private pensions...or in other words...fixed annuities....any good fixed annuities like from MassMutual didn't register one blip from 2008. I know some one who lost his pension who worked for an airline....if he only had a fixed annuity...he wouldn't have had his own money stolen.

[Gyrode]

Additionally, let me play as a smarter democrat...the Social Security Admin should have been a separate government corporation so the government couldn't borrow against the money...it was always a sneaky tax...like a compulsory bond...but it wasn't sold that way.

[RiLLyInc]

Im chilean, in the 2007 and 2008 I lost 5%-10% of my saving, but when the

economy was stabilized my founds not only revocer the 10%, but I win a 5%

more of the peak. This is LONG TERM, the only people who "loss" in 2008,

were the people who where ready to retire in 2008, but they wait a

year, and recover that downhill.