Whats wrong with privatizing Social Security?
Privatization would cost a bundle-and the burden of paying for it would be devastating for working families. Initially, at least, we’d have to pay for two Social Security systems at the same time: today’s program for current beneficiaries and the privatized system. The added costs would require: • Raising the retirement age to 70 or older, • Deep cuts in guaranteed benefits • Cutting or eliminating cost-of-living adjustments • Creating huge new federal deficits • or, some mix of these bad choices. Raising the retirement age to 70 or older would be especially hard on workers in physically demanding jobs and workers of color (many African American men, for example, wouldn’t live long enough to ever collect benefits because their life expectancy is 66.1 years). We could expect privatization to cost more than Social Security long after the transition period. • Social Security spends 1 percent of its money on administration. Administrative costs for private insurance range between 12 and 14
