Privitization of Social Security
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Privatization of Social Security
We are facing a crisis in Social Security due to financial irresponsibility of the government. Republicans feel that a change needs to be made or else people born after the year of 1950 may not receive any Social Security benefits when they are at the age of retirement. Republicans are currently promoting privatization of Social Security as a way to fix the problem. President George W. Bush feels very strongly about this and feels that this is the only way to save the Social Security benefits. On the other hand, Democrats feel that this system would not work as Nancy Pelosi-(D) says, “let a guaranteed benefit not turn into a guaranteed gamble”. If this system were to be implemented it will mean that a portion of an individual’s payroll taxes for Social Security is put into separate accounts which will then be in the control of. private companies. They will then invest your money in stocks, bonds and Mutual funds. The benefits of this promotion are that people would have supplemental income to add to any 401K plan or a pension plan, instead of having minimal Social Security benefits or none at all.
The cons of this reform are that this whole new system is going to add 4.9 Trillion dollars to our current debt, to which we owe different countries. Today’s social security insurance protects workers and their families financially incase of a death, disability or accident. Creating private accounts would make social security financing worse, not better, and would also dampen financial growth and weaken future finances of Social Security. Other countries have implemented this system and have been disappointed with it. The odds are against people investing successfully. This actually is a detrimental disadvantage of the system. People can lose their money that they have put away from their paycheck in a blink of an eye, as there are no guarantees to investing. This is frightening because it can cause a tremendous amount of insecurity. What you get would depend on the whether you retire when the market is up or down. This is also another risky aspect, as there is no guarantee that the market will be one way or the other and stay that way for a length of time. Wall Street would benefit from the taxes, private accounts would require a new government bureaucracy. Young people would be worse off. Woman would lose the most if this new system were to be implemented. Minorities would become more vulnerable under privatization. Retirees would not be protected against inflation. It will slash your guaranteed benefits by at least $4,500. It would also take away .70 cents per dollar in a private account and return it to government. Another negative aspect to this is what would happen to the people the disabled. A child with Autism who has developmental disorder, characterized by impaired communication, excessive rigidity, and emotional detachment, will rely on Social Security benefits for the rest of his life since he will not be able to work because his permanent disability. This child will not get any money as he has not worked or will not be able to work. Privatization would open Social Security up for corruption. The politicians would decide which Wall Street firms are handpicked to make billions of dollars of inflated fees from the investment. The way that it would affect Asian Americans and Pacific Islanders is that they are less likely to have a job-base pension and long life Asian American’s also have longer life expectancies, a woman at the age of 65 can expect to live until she is 88 years old
In spite of all the cons of the privatizing social security, many republicans feel very strongly that this would be the only thing that could save the Social Security system. On January 31, 2005, a three-month long internal debate among congressional republicans ended. They then launched a months long campaign to convince constituents that rewriting the social Security law would be a lot cheaper than if they left it alone and done nothing to it. The campaign was opened with a lot of pressure to the senate democrats to convince them that this system would work, but in turn, the democrats are putting up a big fight as they also feel strongly that this system would not work and would create a lot more problems for the government than we already have.
A new Social Security system implemented would put more people in poverty. There is no guarantee that the system that George W. Bush would like to implement would work. What is to say that after making such a major change that it indeed would be better? It certainly would be worse for Americans, and republicans have come up with such