Sunday, October 31, 2010
The Pros and Cons in Privatizing Social Security
There are several concerns as of late regarding the system of social security. Some argue that it is a source of market failure calling it intergenerational injustice, while others argue it is a system that has worked for many years, and wonder what problems we would face if it suddenly changed. There are several positve consequences of privatizing social security. First, it wouls lessen the hinderances for work and savings and is likely to contribute to an increase in economic growth. Second, with advance funding, it is likely that the program will need the repeated fixes that have become normal occurrences in the social security program we have today. And finally, investing in private accounts would create a way to avoid the government spending social security money to cover deficit spending. Privatizing social secuirty would give those donating today a sense of confidence about the future, the same confidence that is enjoyed by the beneficiaries of todays social security. Privatizing social securty would allow for a bridge in the generational gap created by the current system.