# News Should Social Security be privatized?

1. Oct 10, 2008

### Ivan Seeking

Staff Emeritus
McCain supported this. I'm not clear on his current position, but it certainly speaks to his judgement.

Of course the fundamentals of the economy are strong.

http://www.aflcio.org/issues/politics/mccain_retirement.cfm [Broken]

http://articles.latimes.com/2008/may/19/nation/na-obama19

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2. Oct 10, 2008

### Benzoate

Isn't Social Security going to go bankrupt anyway whether we privatized it or not ?http://money.cnn.com/2006/05/01/retirement/SStrustees_2006report/index.htm?cnn=yes My generation won't have a Social Security to used , so it really doesn't matter if it becomes privatized or not. Why should continue we be forced to give money to old people anyway when they have to be the wealthiest demographic in this country. they don't need any money.

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3. Oct 10, 2008

### Ivan Seeking

Staff Emeritus
The "old people" already paid into the system. Why do you want to steal their money?

There are many old people who have nothing but SS as an income. Do you know how much they receive?

4. Oct 10, 2008

### Cyrus

I heard on the radio (cspan radio) someone talking about how SS, had it been privatized, would have taken a huge hit with the economy going down and many people would have lost a big % of their SS checks, since the private company would have lost a huge share: but because its still gov run, the retired lost only in their 401K, and not in both. I think the number was somewhere around 20%.

5. Oct 10, 2008

### Benzoate

Do you know my generation will not reak any benefits from SS? And There are a lot more people my age who have no income than compared to the number of old people who have no money. Should there be a federal gov't program geared towards aiding students in paying off their college loans? I this point , since we are helping bail out a couple of a investors who made bad investment decisions, then we should make college free for students. After all , we needed the most since we are one of the poorest demographic in the country. Spending need to saved more and stopped buying things that they can't by right away . Too many americans don't practiced saving and investing their money and too many americans spend way beyond their means. Its there fault that they have nothing after retirement.

6. Oct 10, 2008

### Astronuc

Staff Emeritus
The Social Security system already has more future obligations than revenue coming in. The government takes the money, invests puts it in the Treasury, and then spends it. I've heard that there is a surplus in the SS account. That may be so, but that money was spent in other accounts - so in reality there is not surplus.

Starting in 2014, with current revenues and outlays, the outlays (which are increasing as baby boomers retire) will exceed the revenue (which are decreasing - younger folk don't earn as much as older folk - and there are more baby boomers leaving the workforce than younger folk entering).

As of 2014, there will apparently be slowly increasing deficit in the cash flow.

Would privitization work? Well - given what we've seen during the past few weeks the answer would seem to be - NO!

Then what is the alternative. The government will not be able to sustain SS, and neither would private investment corporations or financial services companies if they are managed the way the failed companies have been managed to date.

What will need to happen is a substantial restructuring of the US and global economies.

7. Oct 10, 2008

### vanesch

Staff Emeritus
I think that all things which touch upon "security" cannot be privately held. After all, private initiative comes with contracts and risk taking, be it the risk that the contractor is going to (be able to) respect the contract. Even though that risk may be small, it is incompatible with something which is called "security". That doesn't mean that "complementary insurances" of whatever social nature cannot be private. But insurance is not security.

8. Oct 10, 2008

### Astronuc

Staff Emeritus
If investment = gambling, then it is not security.

I think we see the effects of inflated investments, whether it is real estate or equities. The earnings/returns simply have not justified the value of equities.

Too many people and institutions over-extended themselves for the economy to handle, and that is a systemic problem that must be corrected.

9. Oct 10, 2008

### turbo

SS should not be privatized. The fund can be shored up with small adjustments. The people who scream about future obligations of SS and say we need to privatize SS NOW are the same ones who deregulated our financial markets and engineered this give-away of taxpayer money masquerading as a bail-out. To subject SS to the whims of the markets would put the lives of many people at risk. My IRA has lost over 20% since January, despite being very diversified. How would you like to know that your grandmother's SS check is 20% smaller now than in January, with heating season staring her down and food costs rising?

10. Oct 10, 2008

### Gokul43201

Staff Emeritus
I think SS, as it exists now, should be completely phased out and terminated over the next 2 decades. It should be replaced by a much smaller (financial) disaster relief fund. As long as the markets are being reasonably well behaved, the overwhelming majority of the population should learn to take care of themselves.

11. Oct 10, 2008

### Jimmy Snyder

In spite of all the garbage talk, SS is not going to fail. It is invested in the safest security there is. You can say all you want about how unsafe it is, but you can't find safer. Neither will it go away. Everyone knows that if not for SS, their parents would move in with them. End of discussion.

12. Oct 10, 2008

### LowlyPion

I trust you are not planning a career in elective office in Florida.

13. Oct 10, 2008

### Benzoate

bad investments are not the solution obviously. Forcing americans to pay 12 percent of their income into a system that will eventually go bankrupt and there will be no future beneficiaries o the system is flat out wrong!! People should be taught or they should teach themselves to invest their money wisely or saved their money . I think that is spending money on things we do not have is a BIG problem in this country and the problem is being overlooked by many politicians. The solution isn't to spend spend spend , whether our decision is rooted in personal choice or in the government forcing us to spend our money on government programs and services. We must saved! It a shame that they don't teach you how to invest your money wisely in college.

I alsi think that the financial situation of many americans would be in better shape than it currently is if we change are monetary system , returning to gold standard rather than sustaining this fiat currency we have now. If you buy gasoline with silver coins, the price of gas will relatively be the same as the price of gas you bought in 1964.

14. Oct 10, 2008

### Gokul43201

Staff Emeritus
How does one steal "their money" without actually taking anything?

15. Oct 10, 2008

### Benzoate

The US government is the only entity participating in the act of stealing.

16. Oct 10, 2008

### Jimmy Snyder

Annual production of silver is roughly 850 million ounces, of which roughly 650 million ounces are used in industry, photography, and jewelry. http://www.silverinstitute.org/supply/index.php" [Broken]
Annual production of gold is roughly 80 million ounces. http://www.goldsheetlinks.com/production.htm". I'm not sure of the uses to which it is put. I believe about 30 million ounces are used in jewelry and the rest is cast into coins and ingots. There is relatively little industrial use for gold probably because of its high price. These are guesses.
There are several issues here. One is the relative size issue. If the amount of silver you pay for gas is to be visible to the naked eye, then it would take a traincar of silver to pay for a skyscraper. If the amount of silver for gas is to be in dime size coins, then many traincars for the skyscraper. Moreover, you have the problem that with 300 million Americans, there is only enough production to provide a fraction of an ounce per person per year in silver or gold. The rest of the world gets nothing. What fraction of your annual fraction of an ounce of silver will that tank of gas cost?

If, instead you have paper money with metal backing, then the problem of the train car goes away as you just print bills with large denominations while the actual silver lies motionless in a vault somewhere. As to why we would all be better off if there was a vault full of motionless silver somewhere, I can't say. But you still have the miniscule production problem. A solution would be to have a multiplier. That is, behind each dollar is a tiny fraction of an ounce of silver. That way, if there were too few dollars in circulation for an efficient economy, you could decrease the silver backing. I assume that Congress would gleefully reduce to the point that you could count the number of atoms of silver behind one dollar. How is that different from what we have now?

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17. Oct 10, 2008

### turbo

I guess we could base our currency's value on stockpiles of tulip bulbs...

Nah! It didn't work so well the first time.

18. Oct 10, 2008

### Ivan Seeking

Staff Emeritus
The suggestion was that we should cut-off the checks going to people who are entitled by a lifetime of payments. That is theft.

19. Oct 10, 2008

### Ivan Seeking

Staff Emeritus
That is not a fact. That is a prediction that hasn't changed since I was your age.

You have the ability to get a job and earn income.

How is money paid to the SS system the same as money not paid into the system? You haven't pain into SS or a college fund, so why should you get a handout? Perhaps you should save and invest and not overspend.

There are lot of people who invested in SS based on a contract with the US government, but you want to steal their money.

20. Oct 10, 2008

### Benzoate

But there periods in US history when are currency was backed strictly backed by Gold metal. We can all agree that inflation was never a problem , the exceptions being that the price of gold would steadily rise during wartime. We are producing a lot more paper money that is not backed by any valuable metal like gold or silver, therefore it is worthless.

How is our fiat system is better than the gold standard when gold isn't driving the prices of goods and services up and therefore lowering the living standards of the middle classes whereas the price of gold has remain basically flat over the years compared to the dollar due to overspending and borrowing money from other countries.

I don't understand how it would take a traincar of silver coins to pay for a skyscraper; There would be a lot less silver coins compared to the number of dollar bills used to pay for a skyscraper. In one period in US history, an ounce of gold was worth $35.00 now an ounce of gold is worth as much as$1030 per ounce. You could pay your apartment rent with one ounce of gold .

Even our founding fathers didn't want our currency to be backed by anything other than gold or silver and forsaw the problems with a fiat currency .
Section 10, Clause 1 (Contracts Clause): No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.(http://en.wikipedia.org/wiki/US_constitution#Original_pages_of_the_Constitution)

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