Cost Of Privatization

Social Security has been a very beneficial government program for elderly people, and those whom they support, when being an active member in the workforce is no longer an option for reasons such as old age, disability, or death. Destruction of the program, or worse, lack of the aid, would be catastrophic. Without it, it could leave many senior citizens that can no longer

Our nation ensures social welfare through Social Security. However, the United States cannot ensure the welfare of its own welfare system. To save Social Security, Americans in general do not favor an increase in the payroll tax, a cut in benefits or an increase in the retirement age. Furthermore, Americans are relying upon Social Security as their sole source of income at increasingly alarming rates. Social Security is intended to supplement retiree income, not account for 100% of it. Through elimination of the potential options, that leaves one necessary action: invest the Social Security trust fund in the stock market.

It’s a matter of either losing all that you have worked for and live in poverty when retired or allowing your hard earned dollars to grow and have a secure comfortable retirement. I believe that Social Security is a doomed Government Program and that Privatization of Social Security would allow for a more secure retirement plan for all Americans. Social Security was first created to help aging Americans in their senior years so they would not end up in poverty. Social Security was signed in as law on August 14, 1935 by President Franklin D. Roosevelt and was fully operating by 1940 (SSA). Originally a retirement program, but Social Security now includes survivor benefits, disability benefits and Medicare and all together is the largest

Those who think that privatizing social security will benefit the citizens who receive it are very wrong. The reason that they think that it will affect social security is because by creating private accounts, it will cause the separate interest rates for the individual person to go up or down depending on the person. This of course is unnecessary because the way it is set up right now, the individuals are receiving benefits that work for the certain situation that the person is in. Many retired citizens are not in financial crisis because of this setup, because there is nothing that is wrong with it. In the last couple of decades social security has completely transformed the way that elderly citizens in our country live their lives. According to Mortimer Zuckerman “roughly two thirds of people over 65 and older depend on social security for at least half their income, and roughly 20 percent rely on it for all their income.” These are pretty promising numbers regarding the way that the American seniors are spending their

Many pros and cons arise with this option of Social Security reform. With other options the government takes the risk, but with privatization it is a personal risk. When account holders reach retirement they are able to withdraw from the account and use the money as they see fit. Government does not control the amount or what the account holders use the money for, leaving recipients with the choice to spend as much of the money as they wish and as quickly as they want. With no control over the usage of savings, this defeats the purpose of Social Security as a “safety net”. The biggest downfall to this reform is the transition period. Not only would the transition be a high cost, but those that are closest to retirement could be left with smaller savings in their private account. If young workers create private accounts then they are not supporting current retirees, and they are not receiving what they should be (Mitchell 2011). Another concern is that not all recipients will end up with a fair amount of earnings in their account. Such

Privatization of the United States Social Security system could actual be more efficient than the publicly operated system. Chile switched its public retirement system to a privately ran system to a less expensive system that has been fairly successful (Bosworth). Social Security privatization is overall a better option because it will increase the rate of the returns of its recipients. American 401K invested in US treasury bonds received between a 1.9% to 4.2% rates of returns while the average person born in 2004 will receive a rate of return of 1.7% (Bosworth). These bond options are as stable as a regular Social Security option is because both are provided by the government but a privatized account allows workers to pick higher yielding accounts. Privatized accounts allow for workers to also invest in the stock market at a higher risk reward basis. Survivor benefits from the death of a family member who paid into Social Security received from 75% to 71.5% for at least 10 years (Survivors Planner). This is the main flaw of the current Social Security system is that the result of an early death, the worker's family is at a significant disadvantage economically as well as emotionally. This lead to the main argument brought up by Barry Bosworth chair of international economics and Gary Burtless chair of senior fellow economics that the privatization of Social Security

It’s a matter of either losing all that you have worked for and live in poverty when retired or allowing your hard earned dollars to grow and have a secure comfortable retirement. I believe that Social Security is a doomed Government Program and that Privatization of Social Security would allow for a more secure retirement plan for all Americans. Social Security was first created to help aging Americans in their senior years so they would not end up in poverty. Social Security was signed in as law on August 14, 1935 by President Franklin D. Roosevelt and was fully operating by 1940. Originally a retirement program, but Social Security now includes survivor benefits, disability benefits and Medicare and all together is the largest

If a Social Security Act were being built today, I think it would look much different from the version that was created in 1935. There are many factors that have changed dramatically, and while there have been updates along the way in an attempt to address them, the program has still lagged behind to cause some to question its effectiveness and longevity. The very idea that government would be intervening in something that has such a large economic impact on the economy is frightening, but I do not feel we can rely on a system without Social Security. Today people live longer, has less saving, and right or wrong, have a higher expectation of living than people did decades ago. We live in a civilized country that contributes to helping others throughout the world, would we turn on back on our elderly or hope that someone else will find a solution? The idea of keeping government out and allowing a private solution sounds great, but ultimately I feel the problem will shift onto the citizens.

Roosevelt and his Economic Crisis Committee, in 1935, came up with the simple idea of providing benefits to the generation of retired workers from tax money of currently working generation. Roosevelt put this straightforward idea into the system to make it work, and it surprisingly has worked out well so far. When the bill became a law in 1935, there were many people who were affected by the Great Depression and sought financial aid. Unlike the bank money that goes in loans and still depositor have access to the money; Social Security System passes out collected money immediately into benefits (“Social Security System”). This way, the working generation will always provide enough money to the fund. Rather than providing money from government fund, idea of benefiting citizens from their own money didn’t receive

First, Social Security has a poor return on investment. Most folks could double their earnings by simply investing money that goes into SS into a decent mutual fund. Secondly, Social Security isn't your money. When you and your wife die, that's it - no money goes to your kids. Money invested in the private sector is yours to will to anyone you want. Third, Social Security is anything but secure. It will eventually go bankrupt in the coming decades if SS taxes are not raised, benefits decreased, or the eligible age to receive SS funds increased. The reason it's going to go bankrupt is because Americans are living longer and the ratio of workers supporting the program to retirees benefiting the program has reversed in the last 20 years. It's

Firstly, opponents of Social Security privatization worry there are many risks involved. They worry about risks associated with investing in the stock market.They believe this because investors are not able to accurately predict what the market will do next. According to a researcher at the Cato Institute, a research organization on public policy, Michael Tanner, states there have been many big drops in the stock market over the years. Nobody is certain what it will do next (1). The market could be up one day and down the next like a rollercoaster at an amusement park. Many people do not want to privatize Social Security because investing in the stock market involves many risks, especially if all the money invested is intended to last throughout retirement years. There is no guarantee any money will be made. Many people also have the chance of losing large sums of money. People are FRIGHTENED (sad) they could lose their safety net and have no money left. Some people also believe it could be risky to involve the government with the stock market. A database that specializes in business, political, and government debates believes, if the government were to become involved with the stock market it would “undermine basic free market principle and impair the economy” (“Social Security Reform” 1). Some people are afraid the government would become too involved and control what is PRESUMED (believed) to be a free market. It could corrupt the stock

     Social Security has always struck me as a socialist program. Returning to our capitalist roots is where we will find the solution to this problem. Privatizing Social Security offers solutions to our current problems, and empowers the people with ownership and a voice in their

I understand your point on the Social Security Act, but do not agree that the Federal Government should provide the support. I think government intervention should be the last resort and not an automatic action based on age. The only way Social Security will work is if people can only take out what they put into the program. Since there will be older people who did not have a chance to put into the program before it started the program will not be financially stable and will always run behind.

     There is much-heated debate on the issues of Social Security today. The Social Security system is the largest government program of income distribution in the United States. People are concerned that they won't see a dime of what they worked so hard to contribute into the Social Security system for so many years. Social Security provides benefits to about forty-three million Americans. Not only to retired workers, but also to their spouses and dependents of the workers who die prematurely. It also provides benefits to disabled workers and their dependents. Social Security appears to most people like a simple retirement saving’s account. After all, you generally

Back in 1950, as the baby boom was just getting started, each retiree's benefit was divided among 16 workers. Taxes could be kept low. Today, that number has dropped to 3.3 workers per retiree, and by 2025, it will reach--and remain at--about two workers per retiree (Social Security Reform Center – Problem). The number of workers for each beneficiary dropped from 5.1 in 1960 to 3.3 in 2006. This is expected to decrease to 2.1 by 2030 (Klay & Steen). Baby boomers are going to retire and Social Security begins to spend more on paying benefits than it receives in taxes in 2017 or 2018 (Social Security Reform Center – Problem). This means Social Security will begin to handle very large funding problems because of the amount of people retiring and the worker/beneficiary ratio falling. This is caused by the increase of the payroll tax 17 times since 1935 (Epstein). Currently Social Security is not having any issues with payments. It lifts 1.3 million children and almost 13 million senior citizens out of poverty (Merino). The other side of the problem though is fairness. For example, you give someone $20 every month to save until the end of the year for you, but until then they can lend out that money and use it how they want until the end of the year. At the end of the year you might have your money or someone else’s money.