Why is Privatization of Social Security bad?

Question

i had a lunch with some financial advisers today and they seemed to make sense to me. I'm looking for someone Else's point of view not some insults. i am just trying to understand and learn something on this issue

Answer 1

I think is is a good idea because people that head these private funds are hired on performance and get bonuses based on profits. This being said I believe that if we privatize social security it will have the drive to succeed that is missing in our current system.

Answer 2

Presently, the excess funds contributed by taxpayers into the Social Security Trust are intended to provide a buffer for future benefits when revenues diminish as the number of taxpayers decline and the number of retirees increase.  Theoretically, that is what people are led to believe: that a Trust Fund exists and that it will be used for future benefits.  In reality, any excess funds are immediately used by the Government for general operating expenses.  In turn, Government writes the SS Trust fund an IOU.  Unfortunately, the IOU can only be paid with general revenue funds as they become due.  Since the government operates in the red, there are no surplus funds with which to repay Social Security.  This leads to either increased taxes to repay the debt or writing checks that further increase deficit spending.  In short, Social Security excess funding provides a cash cow for general operating revenues and it really just amounts to an additional tax on lower income individuals that is masked as savings for future years.

If you privatize Social Security, those funds that are used outside of government are not as readily available for the Government's general operating revenue.  The result is that Government will have to be more creative in conjuring up ways to increase taxes without getting the masses all riled up.  This can be done by reducing allowable deductions on mortgage interest and other deductions (charitable contributions, property taxes, limits on health care costs, etc.) or by increasing taxes or imposing taxes on items not generally taxed.

Bottom line, it's a cash reserve or pot of money that Congress does not want to lose.

Answer 3

The goverment thinks it's bad because they'll lose control of the money.

I think it would be great...never happen, but great if it did.

Answer 4

Unfortunately our democrats will never allow it Galveston Texas was able to opt out of the system in the 80's they are receiving 2 to 3 times the monthly payments SS recipients get.

Chili tried to emulate our plan but abandon it when they realize it would not work they privatize it and it working a lot better. our politicians are more about control than what's in the best interest of the American people one party tried partial privatization but was shot down by the other.

Answer 5

there is nothing bad about privatizing it.  what is bad is that the government steals money out of our paychecks and some of it to pay for the retired people on SS today, and some of it to pay for other unconstitutional programs.  the government wants you to think that the money they steal from you in SS is in a locked box waiting for you when you retire, its not, and the us dollar is devaluing at a fast rate because of the policies of the federal reserve printing money whenever they want to.  if the government stopped taking our money, we could invest it as we see fit, which would lead to much more profit for us in retirement, or just spend it now.  the government shouldnt be legislating morality about how people should save their money.

Answer 6

Let's sell it to Enron or Silverado or Bear-Stearns. Maybe they can invest in real estate and make those CEOs some real money. With some of the financial wizardry that seems to run in the bush family tree, I'm surprised there's any left at all.