The article reports:
In 2012, the Chilean government invited a group of journalists to the South American country to show off its innovations — language programs, new uses for llama fur, greenie aquaculture, microfinance, quake-proof skyscrapers and the world’s most powerful telescope.
But there was one thing missing amid all these new ideas: recognition for Chile’s most spectacular innovation, the one that made the country’s development into a first-world country possible.
That concept? Chile’s 35-year old private pension program, which a new report confirms is working spectacularly well.
Sergio De Castro, the dean of Santiago’s Catholic University, became Finance Minister of Chile in 1976. He began a free market revolution in the Chile. Jose Pinera designed and implemented the profoundly innovative private pension system, which up until then had never been tried — and which was copiously praised Milton Friedman?
The article further reports:
Pinera, who was Chile’s labor minister in 1978, knew that the idea of private pensions would have to be sold to the public. Economic ignorance was widespread, and he utilized the most important media outlet of the day, radio broadcasting, to give five-minute talks for the citizens on savings, ownership, control, responsibility and wealth building — which are the pillars of the Chilean Model — and have as their ultimate reward a comfortable retirement, which Chileans now do.
His daily broadcasts led to sign-ups for the new private pension option that went well beyond expectations. At the time, Chile’s leaders had expected 4% of the population to sign up, but got 25% right off the bat.
I am somewhat convinced that the problem in America is not economic ignorance–it is people who are wrongly informed on the subject of economics.
So what were the results:
A Wharton professor, Olivia Mitchell, recently went down to Chile to sort the complaints out, and found that there was nothing to complain about — the system worked exactly as advertised, creating wealth and providing a dignified retirement for millions of people well beyond what the state could accomplish and, in fact, a much better one than Americans get with Social Security.
We need a leader with the courage to copy what has already proven successful rather than continue with the current ponzi scheme that we call Social Security.