I had to sigh when I read Kay Hagan's dig on Senator Elizabeth Dole (R-NC) regarding the privatization of Social Security. Hagan is the Democrat running against Dole in this fall's North Carolina Senate race.
Citing the performance of the stock market over the past several weeks, particularly this past Monday, she asked "Where would we be in the last two weeks if Social Security had been privatized?"
It is this type of short-term thinking that got us in the mess we're in. The obvious question that Dole should reply with is "Where would we be if Social Security had been privatized from the start?"
Since 1937, when the first payroll taxes were deducted for Social Security, the Dow Jones Industrial Average has risen from roughly 150 to the 10,000+ level it is at today. Put another way, $1000 invested in the Dow 70 years ago would be $66,000 today, a compound annual growth rate of over 6%.
Has the government done that well with Social Security funds in the past 70 years?
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