Is Privatizing Social Security Really the Solution?

[selfAdjoint]

Not Social Security, but the Deficit

Here's an analysis showing that instead of the SS running out of money it's the economy that will run out of money because of the deficits. The SS is supported by taxes now, and will continue to be after the "day of reckoning". But where will the taxes come from if the country is broke?

 

[Locrian]

Well there is a certain truth to that - SS has been investing its surpluses in govt bonds for decades. If the government can't pay, SS will be bankrupt very soon.

However, even without this problem, SS would be bankrupt before 2050. So althought his is an important issue, it hardly means the more fundamental problems aren't there.

 

[GENIERE]

...Another part of the issue is timeframe: Someone who is in their 60s doesn't much care what happens to Social Security 30 years from now and will fight (vote) tooth and nail to prevent any changes. Someone in their 30s cares greatly about it and will fight hard to make positive changes. And a lot of what would be positive for a 30 year old and 60 year old are mutually exclusive.

I made choices in the past, sometimes with difficulty, so as to not be dependant on the government when I retired. I'm sure there are many like me who wish to rid their children and grandchildren of the burden of supporting and caring for their elders.

Only a young fool and a selfish bastard would want to preserve SS in its present form.

 

[Kerrie]

it might be beneficial for america to analyze the perspectives of europe's retirement system when it comes to the elder generation...perhaps compromise that into a corporate/free enterprise system?

 

[GENIERE]

it might be beneficial for america to analyze the perspectives of europe's retirement system when it comes to the elder generation...perhaps compromise that into a corporate/free enterprise system?

European retirement systems are going down the tubes. Europe has nothing to teach and much to learn from the worlds oldest constitutional government.

 

[Kerrie]

that is why i mentioned a compromise. obviously our system is going down the tubes as well, social security specifically.

 

[russ_watters]

I made choices in the past, sometimes with difficulty, so as to not be dependant on the government when I retired. I'm sure there are many like me who wish to rid their children and grandchildren of the burden of supporting and caring for their elders.

Only a young fool and a selfish bastard would want to preserve SS in its present form.

I'm glad to hear that, but I'm sure you know that some of the most fervent supporters of the current system are those now (or soon to be) getting money from it. My dad gets AARP magazine and there is an article urging opposition to any changes in virtually every issue. You're a minority.

 

[kcballer21]

Someone in their 30s cares greatly about it and will fight hard to make positive changes

"The date at which the trust fund will run out, according to Social Security
Administration projections, has receded steadily into the future: 10 years ago it was 2029, now it’s 2042. As Kevin Drum, Brad DeLong, and others have pointed out, the SSA estimates are very conservative, and quite moderate projections of economic growth push the exhaustion date into the indefinite future."(Krugman)
It appears that the urgency of the situation has been exaggerated for political purposes. What better time to lie about the hopelessness of the SS system than while we are fighting a war that isn't going very well.

Social security and medicare are currently disasters.

Maybe, but they don't have to be disasters. "The bigger problem for those who want to see a crisis in Social Security’s future is this: if Social Security is just part of the federal budget, with no budget or trust fund of its own, then, well, it’s just part of the federal budget: there can’t be a Social Security crisis. All you can have is a general budget crisis."(Krugman) Which means that instead of making SS the immediate problem, maybe fiscal incompetence should be addressed.

Europe has nothing to teach and much to learn from the worlds oldest constitutional government.

Maybe, but Britain can teach us something about the actual costs of privatization in the form of fees. SS isn't perfect, but it isn't going directly down the tubes. It would work fine if the trust fund was treated as a 'lock box' and if the gov't were not so reckless. To paint partial privatization as this cure-all that we have been denying ourselves for decades is to be deceptive. Did anybody read the article?

 

[Locrian]

"The bigger problem for those who want to see a crisis in Social Security’s future is this: if Social Security is just part of the federal budget, with no budget or trust fund of its own, then, well, it’s just part of the federal budget: there can’t be a Social Security crisis. All you can have is a general budget crisis."(Krugman) Which means that instead of making SS the immediate problem, maybe fiscal incompetence should be addressed.

No doubt that fiscal incompetence should be addressed. However, just because we've been cheated by our representatives who have tricked social security into being "just part of the federal budget" does not mean that they can keep doing this, or that we should allow it.

 

[russ_watters]

"The date at which the trust fund will run out, according to Social Security
Administration projections, has receded steadily into the future: 10 years ago it was 2029, now it’s 2042. As Kevin Drum, Brad DeLong, and others have pointed out, the SSA estimates are very conservative, and quite moderate projections of economic growth push the exhaustion date into the indefinite future."(Krugman)
It appears that the urgency of the situation has been exaggerated for political purposes.

There is controversy over the numbers, but that's not the only reason to want a change: if you invest your money conservatively, you can do far, far better on your own than with SS. So its not just about whether or not the system will stay afloat or fail, but how well will it do what it was designed to do.

 

[GENIERE]

Apparently I was incorrect re: European Social Security. We can, it seems, learn from the Swedes who have a mandatory ”privatized” social security system per:

http://www.ssa.gov/policy/docs/progdesc/ssptw/2002-2003/europe/sweden.html

“… In 1999, a new social insurance system plus mandatory private "premium pension" accounts was established. There will be a gradual transition from the old system to the new for persons born between 1938 and 1953. Persons born in 1954 and later are completely within the new system; those born in 1937 or earlier will remain entirely within the old system.”

I was aware that Chile has a privatized system, perhaps someone from these countries might wish to comment.

 

[BobG]

How viable do you think Linsey Graham's Social Security Proposal is? Is this what Bush is supporting?

The bill:
http://www.ssa.gov/OACT/solvency/LGraham_20031118.html

A summary of the bill:
http://www.centristpolicynetwork.or.../lgraham_s1878.html?0.661742765530111#summary

An analysis of the bill:
http://www.centrists.org/pages/2003/11/17_guest_wealth.html