Cain’s Social Security Model Risks Miring U.S. in Deeper Debt

[dkf]

Herman Cain, the former pizza executive surging in polls for the Republican presidential nomination, wants to replace Social Security with what he called the “Chilean model” of private pension funds. Full adoption of that model may push the U.S. deeper into deficit than Greece.

Chile’s system, introduced under the 1973-1990 dictatorship of Augusto Pinochet, diverted workers’ contributions into privately run funds, slashing government revenue over the next few decades in exchange for a reduction in state pension payments 30 years down the line.

The U.S. budget shortfall would rise above Greece’s 10.5 percent of GDP if all of the current payroll tax was diverted into private saving funds, according to Bloomberg data.

While Cain has not elaborated on how the plan would work in the U.S., his campaign rejected the idea that it could have disastrous consequences on the U.S. fiscal picture.

http://www.bloomberg.com/news/2011-10-17/cain-s-social-security-model-risks-miring-u-s-in-deeper-debt.html

[Itchinjim]

1. Wow. Using a Pinochet program as a model.

How unsurprising.

[DonCoquixote]

2. You do not know the half

If the GOP wins in 2012, they will use the Pinochet model in more ways than one. You know they are itching to start signing Death Warrants, and sorry to say, the rednecks and archie bunkers will shout AMEN!