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What would have happened to Social Security if the Republicans had privatized it before the stock market crash? - James E Lewis AKA choteau - 10-14-2012 12:36 AM
- SayAgain - 10-14-2012 12:44 AM
It would have crashed and burned and everyone would have died... What you wanna hear, right?
Hind sight is always 20/20..
- Matt - 10-14-2012 12:44 AM
I guess we will never know. Might be better off than now and it might be the same as now. Either way SS is broken and it isn't getting better.
- wayfaroutthere - 10-14-2012 12:44 AM
It would have been repealed--stupidly. I don't think that privatizing social security is a good idea by any stretch, but privatizing it, letting the funds go away, and then re-publicizing or replacing it would have been a disaster. I can't imagine that the nation would see social security money disappear and not have the politicians try to do something about it--even though it would have been worse than shutting the barn door after the cows are already loose and would have been closer to deciding that the barn was useless and burning it, and making plans to build a new barn while the cows run loose waiting for it.
The answer to your question depends mostly on how long it would have been privatized in your hypothetical situation, and what kinds of investments would have been allowed. If it happened a month before the crash and no one had put 'their' money into good places yet--or if it happened earlier but everyone gambled too much and lost the money with their choices, a lot of money could have been lost.
- out2lunch4now2 - 10-14-2012 12:44 AM
People would have been able to make the choice to invest in gold, silver or platinum instead of the failed federal government. How do you know the market would have still collapsed? Going back and changing one event in history would have a domino effect on everything that has happened since. What would America be like if John Kennedy hadn't been shot in Dallas that November day?
- kpk02 - 10-14-2012 12:44 AM
Nothing different than has already happened to it, except in that case it make actually have retained some value.
You have to understand what happens right now in SS. You put money in, 100% of it goes to pay current outgoing SS checks. So you're immediately taking a 100% loss on your investment. You are left dependent on hoping that the government finds a way to fund your checks when you reach retirement age. They've been doing that through using incoming SS funds combined with borrowing and printing money. That won't work forever and the entire intent of the program was for your own money to stay piled away in order to fund your own SS checks once you reach retirement age. It's fool proof since what you get out is entirely based on what you paid in so the money will always be that. That is until we underestimated the fools and they started stealing from the SS pot to fund other things and changed the rules so that people started receiving more money out than they ever paid in.
But back to the point, I don't see how losing a large portion of the investment in the stock market can be considered worse than losing 100% of it in the current system.
- TicToc.... - 10-14-2012 12:44 AM
Oh come on, you must know that the proposed percentage was less than 3% would have been privatized. But that is not the point and you know it. Its giving people the option to invest money into something that yields real returns instead of being handed a check by the government after they reach the age of 65. The government does not invest that money in anything. Its more of an IOU that gives them the right to not pay if the US goes broke.
- crash.override - 10-14-2012 12:44 AM
No idea. But without SOME kind of reform, then SS is dying a slow death. And Democrats don't seem to care.
http://money.cnn.com/2011/01/21/news/economy/spending_taxes_debt/
Social Security Faces Unfunded Liability of $8.6T, or $73,167.83 Per Household
http://cnsnews.com/news/article/social-security-faces-unfunded-liability-86t-or-7316783-household
Medicare Faces Unfunded Liability of $38.6T, or $328,404 for Each U.S. Household
http://cnsnews.com/news/article/medicare-faces-unfunded-liability-386t-or-328404-each-us-household
Social Security Disability to be Insolvent in 4 years without reform
http://www.newsmax.com/Newsfront/BGOVALL-BGOVHEALT-BGVTTOP-BLCPOLCH/2012/05/29/id/440437
- Ogslog Mcbain - 10-14-2012 12:44 AM
An infusion into the stock market may have actually made things better. My wife worked for a government that did not take out Social Security but put in 3% of their salary and the she also contributed 3% and did that for 17 years. She now has an account of $115,000 that is hers. The government has taken out over $100,000 of my money for Social Security and it is highly unlikely I will ever see any of that money because the government has already spent it. If they had privatized then at least I would have something because I can manage my money a whole lot better than the government and I thought privatization made more sense than the government just taking it and giving it to the moochers.
- Jeff D - 10-14-2012 12:44 AM
My 401k retirement fund took a hit during the 2008 recession, and it's lost money during most recessions. However, it's made a lot more money during periods of growth so it's still worth a lot more than what I put into it. That's how it is with investing, you try to take the long view and not get sidetracked by the bumps. My 401k will be funding my retirement long after Social Security has gone bankrupt.