Here's my viewpoint on the juxtaposition between socialism and capitalism.
almost everyone agrees that social security is a form of socialism; but have you ever pondered it in terms of capitalism? Here's an exercise for you. Call up a manager of annuities at a bank and ask her how much you would have to invest at age 65 to fund an annuity equal to your SS check (along with all the little bells and whistles that are attached.) If you can get the manager to do some number crunching, you will be absolutely amazed. I haven't done this exactly, but I just went on line and did some looking around.
To fund an annuity of $1500 for the lifetime of a male aged 65 and with a 50% residual annuity for his spouse 10 years younger you would need to put up about $1 million up front. And this is only a poor approximation of SS because it does not include COLAs.
Put another way, that hypothetical person has for his lifetime control of $1 million in assets. In theory he could find someone who would pay him a million bucks for his annuity.
Does that, in effect, make the average joe much richer than he or she thought? I submit to you the answer is yes. And how much of that did he pay in? Assume about 14 percent of salary over 40 years at an average of perhaps $50K a year. $280,000, give or take. And he controls almost four times that for the rest of his life. Of course he is a capitalist, at least in my book.
