What are the pros and cons of Social Security?

[brenton s]

There are many different privatization plans. You can find them on our site under the alternatives tab, http://www.FixSSNow.Org.

Privatization is a misnomer. Privatization normally means selling the government business to private interests which provide the same service. In DC-world privatization, we are re-writing Social Security from insurance which helps people plan for retirement to a savings vehicle which accumulates wealth. These are very different things.

Insurance manages risk. People couldn't retire at 65 if they thought that they might live to 100. We pool the risk of old-age so that people can buy insurance against living too long. This concept is exactly the same as auto or health insurance.

Savings is like a 401K or IRA which accumulates wealth. Regardless of how much you save, most people couldn't retire for fear of outliving their assets. We don't know how long we will live, so even relatively wealthy people would have to continue working - just in case they lived to 100.

Cons : (1) We can't afford privatizing Social Security, existing payroll taxes do not cover benefits. If we added private accounts, people would have to pay much higher payroll taxes if we pay benefits to existing retirees.

(2) We have plenty of savings accounts. Virtually all Americans have access to some type of private savings account that is infinitely more efficient than something that the govt could do.

(3) There is no private sector old-age insurance

If you have questions, please feel free to email me here or at Joe@FixSSNow.Org.

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