The Libertarian Party is asking an unusual and thought-provoking question: Why don’t Democrats and most Republicans apologize to the American people when the stock market goes up?
Think about it. When the stock market drops, politicians invariably exclaim: “Thank goodness we didn’t privatize Social Security! Just look how much people would have lost in the stock market!”
But what about when the market goes… up? Imagine the potential earnings that Americans coerced into Social Security have lost because the government won’t let them control their retirement assets.
“After an almost uninterrupted bull market since March 2009 and six consecutive months of stock market gains, why haven’t politicians who are against any kind of privatization of Social Security apologized to the American people?” asks Libertarian National Committee member William Redpath.
“More than two thirds of workers pay more in payroll taxes than the individual income tax. That is money that is forcibly taken from them by the government that they could invest to build real wealth over the course of their working lives, or money that could be spent to make their lives better today.
“Instead, workers are forced into a system in which their payroll taxes are immediately given to current retirees or spent by the government in other ways.
“People should be free to keep their payroll taxes and use those funds as they see fit. If they choose to save and invest, it doesn’t have to be in the stock market. It could be in more conservative investments. However, the stock market has been the best investment over the long run, and attempts by politicians to demonize it harm the American people.”
In fact, notes Redpath — who is a licensed CPA and a Chartered Financial Analyst (CFA) — during any 20-year period going back to at least 1926, the stock market has never had a negative return. According to Morningstar, $1 invested in a basket of small company stocks at the end of 1925 would have been worth $18,365 at the end of 2012.
Indeed, Social Security is a lousy deal for citizens in many ways, Redpath points out.
“Social Security returns are paltry at best and negative for some people. But the big enchilada that no defender of the status quo will address is this: Americans have no personal property rights in their future Social Security benefits. All Americans are beholden to future Congresses for their benefits. And, benefits can’t be passed onto their children and grandchildren, as private accounts could be,” says Redpath.
Plus, of course, Social Security is headed to insolvency, due to its Ponzi Scheme structure.
“Libertarians call for phasing out the current government-sponsored Social Security system and transitioning to a private voluntary system,” adds Geoffrey J. Neale, current chair of the Libertarian National Committee. “This will remove the looming threat of insolvency while allowing everyone… to be self-sufficient and prosperous in their golden years.”