CNN Admits Public Education Failure is Widespread and Systemmic

Of course they don't put that in the headline, but CNN accidentally admits the mandated public education program is not teaching Americans very important lessons in saving and investments.

With most Americans doing a lousy job saving for their Golden Years, Barack Obama says the government has to step in.

Of course, the only solution to government failure is to increase government spending. Obama's plan is actually a very good one if it were in place of the current Social Security plan. The article admits that putting money into an interest bearing account will allow people to retire with 6 figures saved up.

Over time, the amount socked away in these IRAs could grow into a six-figure nest egg. A 30-year-old worker who contributed $1,000 a year and received the $500 match would accumulate $143,750 by age 65, assuming a 5% average rate of return after inflation, according to Ronald Wilcox, business professor at University of Virginia's Darden School of Business.

Now, imagine if the 12.4% of salaries now taken for "savings" in the Social Security scheme were put into an IRA. Assuming Wilcox' average rate of return after inflation, a single person making $40,000 a year over 35 years (from 30 to 65 as in the above scenario), the person would have $689,119.30 in his or her IRA.

Putting this money into a basic savings account at retirement, at 3% interest, the monthly payment from this money would be $1,722.80 without touching the principal AT ALL. If the retiree wanted to use up all the money over 30 years of retirement, that person would use an additional $23,000 from the principal to supplement the $1,722/month to end up with a retirement of about $3,600 per month income for life. And this does not include any potential government "matching" funds.

This is how much retirees across the board should have at retirement. The Social Security program has cost Americans TRILLIONS of dollars of net worth.

Why do Americans tolerate this loss of net worth?

Because of a failed public education system that does not teach retirement, investment and money management knowledge. I think I learned 12 years of Shakespeare and social studies, but had maybe one class where they taught us to fill out a check. The only time interest was mentioned was during math lessons.

Our education system is completely inadequate for 21st century globalization and personal investing. Until either the public education system recognizes systemic failures or opens to competition, the U.S. is never going to solve the root of any problems while losing our standard of living.