>
>, $50 on the US sharemarket in 1955 now is at least $27,000. I'd expect a competent fund manager to do far better than that.
>
Correct.
So, my teacher would have been $27,000 poorer had she paid it to the US.
She wouldn't have invested it, you say?
Probably not, but she might have bought that mythical house you like to posit with an equally robust return.
Either way the compounded value of the $50 is, as you pointed out, is more than equal to the amount she'd have to pay to get the fund solvent.
Therefore, her net worth would be that much lower, had she been coughing it up.
It would have easier then, you say?
$50 doesn't sound like much now but to someone making about $600/month before tax, which my teacher would have been making when medicare started, it was a big deal.
>E.g. if $50 paid annually from 1955 to 1964 then was handed over to Warren Buffett when he took over Berkshire Hathaway that year, it would be worth over $5 million today. A lesser manager might only get to $1M - but that's still enough to pay a lot of medical costs from just 10 years' contribution by one person. Repeat that every year and for every worker, and now Medicare would be a crown jewel handed over to the young rather than yet another liability.
Anyone who does not go overboard- deserves to.
Malcolm Forbes, Sr.