Larry Fink: Government Should Force Mandatory Savings [VIDEO]

full faith and credit of the u.s. government that you’re going to get this money and it’s — it is a form of savings plan. that’s what it is. but it’s not — it’s a nonearnings savings plan. you juxtapose what’s going on in australia. and the individual contributes nothing. but at this time now, and that plan was started in 1992 and began at 3% up to 6%, now it’s at 9% in 2018 goes to 12% of contributions. the australians per capital have the highest retirement plans in the world because this is an investment scheme. you have an opportunity to invest in four or five different types of options. great things for the men and women who are working — the investment firm with the size and scope to manage all this. to be able to manage something like this for the country. a blackrock or — maybe. but the federal thrift plan, it’s a great model. it is a great model and the model that people like me who have written reform bills have said we’re taking 12% of our wages and we’re putting in a system that andrew and i, we’re going to get a 0% rate of return, my kids will get a negative rate of return. my mom about 6% rate of return. the younger you are, the worse you do, and go to a full-fronted system, away from this pay as you go system and let people take a portion of their payroll taxes and put it in a thrift savings plan, like the one i have as a member of congress and federal employee so my money’s working for me so it’s compounding and growing and i have something there that’s part of my propertyt i can — people will say look at 2008 and 2009 when the market got — by the time — you look at it, though — what do you care? so, you know, you were talking about the headline where the markets are. so look at what happened in ’08 and ’09, and if you kept your money invested in high-quality stocks you would have been fine. right. if you’re a liability in 30, 40 years, why do you focus on that? it will be an issue that is raised and people shout about. i love people to raise it now and the proof is in the pudding right now where the markets are today versus where they were. i’m not trying to suggest i was not a calamity, i would not suggest if governments did not react quick enough, we would’ve been in worse shape. i’m not here to be blind what actually happened. but the reality is if you are a long-term investor with 30 or 40-year liabilities, these type of movements and severe as even ’08 was it has proven that it wasn’t significant in terms of your outcome out 30 or 40 years. the thrift savings plan has its default life cycle funds. so adjust per your age. if you’re near retirement, you’re not even in stock market by the time. you’re in fixed income by the time you’re near retirement automatically adjusting. there are ways of designing thesfull-funded plans near retirement. what is mind boggling is that we aren’t taking into account the way that knowledge is increasing right now in terms of health care and there are people that think by 2030 we’ll have cured most — not only most cancers, but even some age-related — by 2040, we may all be living to over 100. and health care’s going to be expensive and no one’s going to die. because we have created — that’s a good thing, but — we have made terminal diseases chronic diseases. that’s right. but we may do better than that. we may do better than that. so far we have not changed much in — we’re on the cusp of how much knowledge we know. hopefully, but that makes a bigger problem. in most treatments, cancer, we have — we made some cancers chronic. on the singularity that will occur in 2035 and 2045. we may get to the point where your cyborgs and your brain is transferred into a machine and you don’t die. are you going to play keanu reeves? similar to the matrix. won’t be any rib eating. we don’t have ribs now. they’re going to leave the snouts. that’s it. the ears. they’ll take all the good stuff. given joe’s expectations, how do you change social security in terms of the age? well, age indexing. what i’ve advocated, what we did with respect to medicare, age indexing. replicate so it moves up with longevity, that means it goes up one month every two years. and it’s hardly draconian. what we’ve been saying long, for a number of time is republicans is these programs are never designed to last as long as they are. when social security was designed, life expectancy for men was 63 and the retirement age was 65 and life expectancy was 63. the numbers were great in those days. we’re saying reflect longevity. let me be a little more additive for a second. if you’re a couple 60 years old, statistically one of the couples will live over 90. so, you know, when you do these age tables, it takes into account all the, you know, young people who have died from some cause, traffic accidents, other causes. it even takes into account, you know, men and women in military deaths and things like that. and so actually, when you’re 60 years old, you have a high probability of living to 90 now. and that’s a big change. you supported president obama. why have democrats not — you did too, by the way. why — why is — why — why do you think the democrats have not been more supportive of some of these — of what seemed like common sense solutions? you know, i don’t know. i’ve discussed this with republicans and democrats of this whole concept of longevity. i do believe if we bring the concept of longevity to the american people, you could have a sensible conversation about entitlements. you can have some sensible conversation. but if we don’t educate about this whole concept of elongated life, then it’s hard and emotional to talk about the changes. and so to me, and this is one of the reasons why we are speaking out a lot more about it, i believe we have to educate. we have to inform. and then i believe that dialogue – can move down a more sensible path.