Social Security Resources

Twelve Reasons Why Privatizing Social Security is a Bad Idea
The Century Foundation

Reason #1: Today's insurance to protect workers and their families against death and disability would be threatened.

Reason #2: Creating private accounts would make Social Security's financing problem worse, not better.

Reason #3: Creating private accounts could dampen economic growth, which would further weaken Social Security's future finances.

Reason #4: Privatization has been a disappointment elsewhere.

Reason #5: The odds are against individuals investing successfully.

Reason #6: What you get will depend on whether you retire when the market is up or down.

Reason #7: Wall Street would reap windfalls from your taxes.

Reason #8: Private accounts would require a new government bureaucracy.

Reason #9: Young people would be worse off.

Reason #10: Women stand to lose the most.

Reason #11: African Americans and Latin Americans also would become more vulnerable under privatization.

Reason #12: Retirees will not be protected against inflation.

Basic Facts on Social Security and Proposed Benefit Cuts/Privatization
Center for Economic and Policy Research

1) Social Security is Financially Sound
2) President Bush's Social Security Cuts Would Be Large
3) Imaginary Stock Returns Don't Offset Real Benefit Cuts
4) Social Security is Extremely Efficient, Private Accounts Are Wasteful
5) Social Security Pays the Most to Those Who Need it Most
6) The Projected Shortfall is No Larger Than What We Have Seen In Past Decades
7) Young Workers Will Still See Much Higher Wages If Taxes Are Increased
8) The Bush Proposal Phases Out Social Security as We Know It
9) Note on Calculating Projected Benefit Cuts Under Plan 2 from President Bush's Commission to Strengthen Social Security

Social Security & Medicare
Center for Economic and Policy Research

Cutting Social Security for Christians?
Social Security Deception Funded With Taxpayers' Dollars

Privatization fix for Social Security is worse than doing nothing
The Economic Policy Institute

Privatization: the 20-Year Plan Cato/Heritage Plan for Privatization.
Published in 1983 by Cato.

Social Security
Center for American Progress

Mutual Fund Fees: More Evidence that Privatization Schemes Won’t Work

This is a great collection of facts, all in one place.

Unfortunately, the NYT article on how the Chilean privatization scheme turned out to be a failure for people who weren't already wealthy has been buried in their archives, and is now information we'd have to pay for.

As I recall, though, part of the problem with that plan was that the returns were much lower than the average service fee, which ran about 15% per year, eating up a lot of money being put into the plan.

People were handed a very ugly surprise when retirement time came around, with much of their intial contribution evaporated or transferred into the hands of brokers.

using Google. Use the name of the article and put it in the "phrase" box.

Then if it is included in the list click on cache

The Galveston Plan
On January 1, 1981, the counties of Galveston, Matagorda, and Brazoria, Texas withdrew from the Social Security system and established their own defined-contribution plans. Should other communities be given the option to withdraw from Social Security. The answer, in my view, is a clear "no" for three reasons.

* While the Galveston plan has certain advantages for some workers (mostly upper income workers) in some circumstances, it lowers benefits for other workers, especially lower income workers, and exposes all workers to risks that no social insurance plan should countenance.

* Those who withdraw from Social Security run away from a burden that the nation cannot escape—specifically, the obligation to pay off the unfunded liability—leave that burden for those who remain under Social Security to pay.

* The withdrawal of relatively high-income municipal workers undermines the capacity of Social Security to provide relatively generous benefits to low earners, one of the central functions of social insurance.

Article
Social Security Reform
Senate Committee on the Budget, January 19, 1999
Henry J. Aaron, Senior Fellow, Economic Studies

Brookings Institute