10-23-2004, 12:20 PM
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#11 (permalink)
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Insane
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Originally Posted by thefictionweliv
And liberals are scaring us into not privatizing it by saying it will create trillions of dollars in national debt by doing so. If we can just let the benifits run out for the next 50 years than privatizing it should be no problem. I want more control over my money and how I invest it, IMO those who think SS actually works should bear the cost of it. Its a flawed system in its state and I can't wait to see it fall.
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Maybe because it would! As the article points out, there is a huge initial cost that would have to be born by someone before transferring everything over to a privatized system.
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The biggest problem with the plan, as countless analysts have pointed out, is easy to see. The Social Security program is currently funded by payroll taxes from the current generation of workers, who pay into system so that the government can pay out benefits to retirees. In essence, every generation owes a debt to the previous generation: we pay for our parents' and grandparents' retirement, just as they paid for their parents and grandparents. And so on. If young workers were allowed to divert their savings into a private account, there would be fewer funds to pay for this generation of retirees, even though those workers have already paid into the system.
So if the government wanted to divert payroll taxes for all workers under, say, the age of 30, it would have to come up with additional money to pay those retirees over the age of 30. Economists estimate that the transition could cost at least $1 trillion -- money that the government just doesn't have, especially in the wake of mounting deficits. The alternative is to either raise existing payroll taxes, or cut future benefits, neither of which Bush is proposing. So the president can claim that he can magically fix the system, but his math just won't work out.
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