WHAT ARE SOME IMPORTANT CONSIDERATIONS WITH SOCIAL SECURITY PRIVATIZATION?
Social Security privatization has become a hot button issue. With privatization, part of Social Security would be replaced with individual accounts. Based on estimates by the Social Security trustees and the nonpartisan Congressional Budget Office, it is clear that privatization will entail more government debt, fewer benefits, and greater risks. Privatization means that money that is currently used to pay for benefits is diverted into individual accounts. Since Social Security has already promised benefits to workers and retirees, this diversion of funds creates a new financial hole. According to estimates by the Social Security trustees, Social Security would need more than $2 trillion immediately, which would, together with interest earnings, pay for the creation of individual accounts. In other words, privatization would make Social Security’s long-term financial outlook worse, not better. To improve Social Security’s financial outlook, those who favor privatization have proposed s
