The Privatization of Social Security Essay -- Social Security Privacy

The Privatization of well-disposed aegis some people dont understand how the genial Security administration reallyworks. There are no separate tender Security accounts set up for to each onetax incomepayer to which he contributes his amicable Security tax each year. Manypeople believe these accounts exist, that the money they pay into theiraccounts grows each year until solitude, and when they retire they getback what they paid in with interest. This is non true. Most people areunaware of the fact that our true social Security transcription is apay-as-you-go course of study, which means that the revenue the federal organization raises each tax year for Social Security benefits is paid proscribedthat same year to beneficiaries. Many economists believe that our Social Security body is in need of amajor overhaul if todays workers are to find out future benefits. Thomas R. Saving, Director of the Private Enterprise Research focalize atTexas A&M University say s, What is wrong is that the Social Securitysystem was never set up to be a sound investment-based retirement system. Karl Borden, professor of financial sparings at the University ofNebraska recently wrote, Social Security is an unfunded pay-as-you-gosystem, fundamentally flawed and analogous in initiation to illegal pyramidschemes. Government accounting creates the illusion of a organized religion fund, but,in fact, excess receipts are spent immediately. Robert M. Ball, former commissioner of Social Security said, Some ofthe trust fund money should be throw up into the stock market. I want to do itto get a breach return for the Social Security system. Historically,long-term government bonds have had a real return, after inflation, of 2.3percent a year, compared with 6.3 percent for stocks. Paul W. Boltz, economist for the T. Rowe Price mutual fund said, Whenwe examine the pending financial crisis of our Social Security system, wefind, in effect, the characteristics of a government sponsored Ponzi-typescheme. Michael H. Cosgrove, of the Dallas-based newsletter, The Econoclastsays, People need to concord the responsibility of investment funds their own fundsfor their retirement. The Social Security system assumes people cant makethat decision and government can do it better. The chair is a bankruptSocial Security System. These economists believe that by investing ... ...oss would have to be made up either by hiking taxes, increaseborrowing or drastically cutting benefits to current retirees. Thepresent Social Security system faces a long-term shortfall of between 1percent and 4 percent of total payroll, depending on your projections offuture economic growth. But the existing pay-as-you-go system could berendered solvent by a judicious combination of increasing the retirementage by twain or three years and slightlyraising taxes. Also in that respect is the question of whether to privatize the whole system, orwhether to add a succor tier . We might keep the basic system butsupplement it with self-governing IRA-like funds. The basic tier would be redistributive and pay-as-you-go. The supplementary layer would be nonpublic and based on individual contributions. A further question is who bears the risk of infection when investments go sour.There is no such risk under the current system. The stock market lookslike a great retirement vehicle in the 1990s, but it wasnt so reliablein the 1970s and 1930s. The program was deliberately designed as a socialguarantee of retirement income, not a system of government-mandatedprivate savings.