Privatization of Social Security

Satisfactory Essays
My Position Statement
My position is that social security should not be privatized because the economic impact for individuals and the nation are enormous.
Economic Argument against My Position
A number of economists support privatization of social security ideology for a variety of reasons. First, there is a general argument that the social security is not an investment system (Estes 10). Thus, workers inject their money for a considerable length of time with very limited returns emerging from this form of saving.
Secondly, current system tends to limit an individual’s ability to engage such savings in diverse investment platforms that would lead to an improvement in their returns (Idemoto 1). On the contrary, current system gives exclusive investment rights to the government. Thus, privatization will offer individuals an opportunity to have control over their investments and investment portfolio diversification on their savings. Smart investments by individuals will yield higher returns. There is a general ideation that the investment market will continue to grow in a near-exponential trend.
Privatization will also lower taxes for individuals and corporations (Idemoto 2). Current taxation for individuals and corporations tend to be exorbitant. When the social security is privatized, individuals no longer have to pay perky taxes associated with social security (Adam 2). Privatization in this case means individuals making their retirement investment decisions rather than having the government or an organization make such decisions for them. Employers too will no longer have to pay these huge social security taxes. The additional contributions towards an employee by these organizations will no longer be a regulatory requirement f...

... middle of paper ...

...lenge in social status, discrimination on women, the injured, and disabled, poor investment, and long-term decline in stocks return when evaluated from an inflation adjusted returns point of view. Thus, social security should not be privatized.

Works Cited

Adam, Antonis. “Macroeconomic Effects of Social Security Privatization in a Small Unionized Economy.” CESifo Working Paper 1371 (2004): 1-16. Print.
Estes, Carroll L. “Social Security Privatization and Older Women: A Feminist Political Economy Perspective,” Journal of Aging Studies, 18 (2004): 9-26. Science Direct. Web. Apr 7, 2014.
Idemoto, Steve. “Social Security Privatization in Chile.” Social Security (2008): 1-7. Economic Opportunity Institute Online. Web. Apr 7, 2014.
Williamson, John B. Social Security Privatization: Lessons from the United Kingdom. Boston: Center for Retirement Research. 2000. Print.
Get Access