Privatization Of Social Security Essay

Disadvantageous, ineffective, and outdated-- social security creates a larger financial gap between those who pay into the system comparison to those who receive the system’s benefits. Today, as the retiree population grows but current birthrates dwindles, the ratio of workers to retirees is shrinking; thus, the younger, working generation is unjustly contributing more than current retirees ever contributed during their working days, and yet, the revenues are still not enough to completely fund all benefits promised by the program. If the current system continues with no reforms, the cost of Social Security benefits will exceed tax revenues beginning in 2020, and the program will become insolvent as revenues become exhausted by 2034 (Social Security Board of Trustees). Clearly, with these alarming statistics pointing to the evident downfall of the nation’s economy and welfare, the price of entitlements is sucking away better chances of greater prosperity for future Americans. In terms of longevity,

Each worker's contribution would be invested in assets to finance his or her own retirement. Each worker would invest their own contributions into individual accounts as assets to finance his or her own retirement plan. Thus, an individual's retirement is fully funded upon retirement rather than depending on contributions from the next generation of workers (Pollard). By eliminating the current system of intergenerational transfer, privatized Social Security will not be affected by inflation or demographic factors, thereby maintaining actuarial fairness. In addition, allowing individuals to invest their contributions in financial assets raises their potential return. A fully funded system should increase savings and thus investment in the economy, resulting in higher economic growth and, therefore, a higher standard of living for all