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| Cato Scholar Outlines Chile's Individual Account Success Posted by James Kilbourne on 12/04/2004, 10:56am | ||
| In today's New York Times, José Piñera, co-chairman of Cato's Project on Social Security Choice, outlines the benefits of Chile's personal retirement account system, a program he designed as Chile's secretary of labor and social security. "Since the system started on May 1, 1981, the average real return on the personal accounts has been 10 percent a year," Piñera writes. "The pension funds have now accumulated resources equivalent to 70 percent of gross domestic product, a pool of savings that has helped finance economic growth and spurred the development of liquid long-term domestic capital market. "... For Chileans, their retirement accounts represent real property rights. Indeed, the accounts, not risky government promises, are the primary sources of security for retirement, and the typical Chilean worker's main asset is not his used car or even his small house (probably still mortgaged) but the capital in his retirement account. "Since they have a personal stake in the economy, workers cheer the stock market's surges rather than resenting them, and know that bad economic policies will harm retirement benefits. When workers feel that they themselves own a part of their country's wealth, they became participants and supporters of a free market and a free society." | ||
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