Social Security Privatization

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Social Security was created when Franklin D. Roosevelt signed the Social Security Act on August 14, 1935. The program provided a social insurance system based on the idea that if workers pooled a portion of their wages, they would be able to protect each other and their families against wage loss due to retirement, disability, or death and has become the foundation of economic security for millions of Americans. “Over the past 80 years, Social Security has become the largest single government program in the world, accounting for 26% of total US federal spending in 2014” (Privatizing Social Security - ProCon.org). Today, more than 47 million Americans receive checks from the Social Security system. Because of such high numbers, the security …show more content…

Proponents of privatization say that workers should have the freedom to control their own retirement investments and that private accounts will give retirees higher returns than the current system can offer, leading to a restoration of the system's solvency ("Privatizing Social Security - ProCon.org”). In reality, however, Social Security was made in order for people to earn the right to participate by working and contributing. The program was never meant to be an investment program. With broader policy goals than private retirement plans, its intent is to provide guaranteed income to seniors, disabled citizens, survivors, and their families. Privatization would severely undermine this system. In addition, many individuals lack the knowledge to make wise investment decisions. Consequently, privatization will do nothing to address the program's approaching loss of money or solve its insolvency. Therefore, Social Security should be neither partially or fully …show more content…

The freedom of individual choice is not particularly useful when a number of surveys have show that most people lack the knowledge to make even basic decisions about investing. For example, a Securities and Exchange Commission report synthesizing surveys of investors found that only 14 percent knew the difference between a growth stock and an income stock, and just 38 percent understood that when interest rates rise, bond prices go down (Anrig). Hiring a professional financial advisor to consult individuals would be an additional cost which they may not be able to

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