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Wednesday, January 6, 2016

Social Security Is A Bad Deal

Dr. Don Boudreaux opines on how "Social Security Is A Bad Deal". Here is a key excerpt:

"Now let’s further assume that employers are also relieved of the obligation of paying to Social Security 6.2 percent of their employees’ salaries. Because relieving employers of this obligation makes the hiring of janitors and other workers more attractive, employers will compete for workers by bidding up workers’ wages. Even if our janitor’s pay increases by an unrealistically small 1 percent, this raise will allow the janitor — if he adds this 1 percent pay raise to his savings [the 6.2 percent of his salary that he saves because that amount is no longer seized from him by Social Security] — to increase his annual savings by enough to yield a pension, when he retires, worth $392,045."

To add insult to injury, this same janitor could take the monies that are taxed from Social Security, work with someone like yours truly, and come out, in the long run, better than the Social Security benefit.

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