Privatization of Social Security

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Privatization of Social Security

When people lease a car, they pay, knowing that they get something in return. When people pay taxes, they pay, knowing it's the law, and many get some money back. What do people think when they pay social security? Many young people see Social Security as something they are paying but will never get anything in return. What is another way for retirement for the United States?

A major topic of retirement talk today often ends up with the new idea of Privatization. Privatization would be a way to retire by means of putting money in your own individual account. It differs from social security because it only goes into separate accounts, not one huge budget. Instead of paying a certain percentage of taxes to Social Security, a separate account would be created for your retirement fund. A percent of your paycheck would still be taken out, but it would be your choice on how much, and no one else could ever touch it, until after your death. You would also be given the opportunity to use this money, and try to double the amount by investing in bonds. Privatization has many benefits, and would be a great help for retirement troubles. It would be a great way for people to leave an inheritence for their families (Tanner, "Saving Social Security is Not Enough").

A feeling of frustration is often felt when people [not receiving social security] obtain their paychecks and a large part of their money goes to social security. If they are of certain age, they will never see this money, as the Social Security system in its present form will be bankrupt. The only way to save the Social Security System is a tax increase. In 1998, a general tax increase of 2.2 percent was planned out to aid in social security (Howe). Now, in 2001, it still hasn't taken place. It will take a larger increase now, three years later. The thought is quite terrifying. With the 2.2 percent increase, it was estimated it would cost around seventy five billion dollars to save social security. The 2.2 percent number was given after looking at the "trust funds" for Social Security. However, all that really exists in these funds are IOU's from the nations Department of Treasury (Howe). A 2.2 percent increase is not a viable solution.
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