Was there an alternative to Social Security?

Our Social Security system is based on a design by Germany’s Chancellor, Otto von Bismarck. Bismarck accomplished a great deal. Maybe it is working for Germany, but the one implemented by the US is a disaster. History of US old age insurance.

The Social Insurance Movement
Otto Von BismarkThe Social Security program that would eventually be adopted in late 1935 relied for its core principles on the concept of “social insurance.” Social insurance was a respectable and serious intellectual tradition that began in Europe in the 19th century and was an expression of a European social welfare tradition. It was first adopted in Germany in 1889 at the urging of the famous Chancellor, Otto von Bismarck. Indeed, by the time America adopted social insurance in 1935, there were 34 nations already operating some form of social insurance program(about 20 of these were contributory programs like Social Security). Philosophically, social insurance emphasized government-sponsored efforts to provide for the economic security of its citizens. The tradition of social insurance would come to be seen as the reasonable, practical alternative to the radical calls to action represented by Townsend, Long, Sinclair and the others.

Back in 1979, a number of Texas counties opted out of the Social Security system. The only entities that could opt-out of SS was state and local governments. Perhaps they still can do so. Let’s see how that worked out for Galveston, TX.

Galvenston Plan vs. Social Security

Not bad! They invested through insurance companies – sort of like a bunch of annuities. The figures would be even higher if the funds would have been invested in low cost index funds like Vanguard. This was covered by Glenn Beck – more here. And SS is truly a Ponzi scheme by definition.

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