Under Bush the younger there was a proposal to allow a portion of social security taxes to be invested in the stock market. The Democrats do what they always do when reform of social security is raised: they demagogued it to death, running adds showing ruthless politicians tossing grandmas in wheelchairs over the cliff. Thus our social security contributions continued to be “invested” in Federal debt. That is what the social security “trust fund” means, paper IOUs from Uncle Sam.
If that proposal had become law, my net return would probably now be well over a million dollars. Just invested in current certificates of deposit that would net an annual income of 40,000 a year. Invested in index funds that would net an average return of of somewhat over 100,000 a year. None of this is hard. It is merely history as to investments and the compounding of interest over time. That our politicians have made it hard in the service of their political advantage is both villainous and entirely predictable.
“Those are IOUs! They’re as good as money, sir!”
~ Lloyd Christmas
Ultimately, the price of capital assets is not going to grow any faster than the income from ownership of capital. It will fluctuate a great deal along the way.
Art-
I may be misunderstanding you. As I understand it, capital (money) is subject to devaluation because it can be created at will out of nothing by a government. With few exceptions, a capital asset cannot be created by government whim out of nothing. As such, the asset can often hold more value than the cash.
Of course, not all assets hold value the same l-some decrease in value. There is vast difference between holding the rights to the Beatles and holding the rights to Milli Vanilli.
Bush 43 was a coward when it came to confronting Democrats. It was his second term that the oldest baby boomers began collecting social security. Soon the youngest boomers…Generation Jones…will start collecting. I intend to start next fall