Trump On Social Security In His 2000 Book: A Ponzi Scheme We Must Privatize
"Does the name Ponzi all of a sudden come to mind?"
Donald Trump says today he wants to save Social Security from insolvency not by raising the retirement age but by taking money back from other countries.
"What I want to do is take money back from other countries that are killing us and I want to save social security," The Donald said on 60 Minutes on Sunday. "And we're going to save it without increases. We're not going to raise the age and it will be just fine."
"We will set it up by making our country rich again," Trump said when asked how he would fix the program. "We are going to do great. As a country we are going to do great."
But when Trump first flirted with running for president in 2000, he wanted to privatize the program and raise the retirement age, and called the program a Ponzi scheme.
"Fast-forward to 1941," writes Trump after a long explanation of the first Ponzi scheme to intro his chapter on "Making Social Security Secure Again."
"This is the second year Social Security benefits have been paid," he continues, "The first recipients of Social Security, even once inflation was factored in, got the equivalent of a 36.5 percent annual interest rate on their initial contributions into the Social Security Trust Fund. For those retiring in 1956, their inflation-adjusted rate of return was still a respectable 12 percent. Julie Kosterlitz, in the National Journal, compares that figure with this: For those who are working now and looking to retire after 2015, their returns will be below 2 percent. And that's if they ever get paid at all. Does the name Ponzi all of a sudden come to mind?"
Trump proposed a number of solutions, first an age of seventy for the retirement age.
"A firm limit at age seventy makes sense for people now under forty," Trump writes. "We're living longer. We're working longer. New medicines are extending healthy human life. Besides, how many times will you really want to take that trailer to the Grand Canyon?"
"The way the workweek is going, it will probably be down to about twenty-five hours by then anyway," he continues. "This is a sacrifice I think we all can make. And I don't accept the criticism that it's easy for guys like me to tell thirty-year-olds they shouldn't retire until they're seventy . Like a lot of people I know, I plan to work forever. My father was in his late eighties before he stopped coming to the office. If you're wondering when my retirement date will be, it will be about one day shy of the death date chiseled on my tombstone."
Next, Trump says privatization is the answer.
"Privatization would be good for all of us. As it stands today, 13.6 percent of women on Social Security live in poverty," Trump writes. "Harvard University researchers studied almost two thousand American women who retired in 1981 and found that virtually every woman—single, divorced , married , or widowed— would probably be better off financially under a system of fully private investment accounts."
"Not one woman would have been worse off," he writes. "On average, personal accounts would have provided a single woman with 58 percent more than Social Security, and wives with 208 percent more. Directing Social Security funds into personal accounts invested in real assets would swell national savings, pumping hundreds of billions of dollars into jobs and the economy. These investments would boost national investment, productivity, wages, and future economic growth."
Finally, Trump writes the answers couldn't be "more obvious": invest your Social Security in stocks and bonds.
The solution to the Great Social Security Crisis couldn't be more obvious: Allow every American to dedicate some portion of their payroll taxes to a personal Social Security account that they could own and invest in stocks and bonds . Federal guidelines could make sure that your money is diversified, that it is invested in sound mutual funds or bond funds, and not in emu ranches . The national savings rate would soar and billions of dollars would be cycled from savings, to productive assets, to retirement money. And unlike the previous system, the assets in this retirement account could be left to one's heirs, used to start a business, or anything else one desires. This sounds simple, so simple that it takes a ninety -year-old retired washerwoman to make plain a solution that has eluded politicians and economists from the elite universities. The strength of the idea, letting people keep the money that is rightfully theirs and investing in something more valuable than IOUs, is gaining so much popularity that the politicians are being forced to pay lip service to it.