Question

with references:

From time to time we hear proposals to "privatize" social security. What does this mean exactly? What are the pros and cons behind this idea? Do you support the current system or do you think it should be reformed? If so, how?

Answer 1

Social Security is a government run program which ensures pension scheme to all citizens in the US across generations. The social security program ensures or guarantees income to senior citizens, citizens with disabilities, survivors and their families. Privatizing social security means the amount the money that goes into the social security contributions will be handled by the private organizations wherein the benefits will be halved and limited. Economists, social activists and policy makers strongly feel that privatization will curb all the benefits that the government is offering currently.

Pros of Privatization so social security :

Privatizing social security will :

1. aid the increase in the returns that the workers earn from the retirement contributions.
2. sharply contribute to the economic growth as well as the national savings.
3. have an immense political advantage owing to the bigger amount of accumulation in the social security reserves.

Cons of Privatizing social security :

1. There will be an increase in the debt burden of all the tax payers.
2. There will be a sharp reduction in the social security benfits.
3. Since the accounts are market based, the individual will be forced to bear the entire risk borne from retirement.

The current system should be reformed since there are a lot of citizens who are yet to receive their retirement benefits. This has to be first settled. Once the outstanding debts are cleared then the entire process has to be streamlined and policy regulations has be brought in. There has to be a time frame mentioned by the government that they will be able to abide by. The ctizens should feel that government will better handle the social security that the private agencies. The trust has be built. Once this is executed, the thoughts of privatization will vanish and people will start contributing more towards the social security contributions.