Would private accounts solve Social Securitys financial problems?
Not initially. In fact, they would make them worse for a time since part of the payroll tax would no longer be available to pay current benefits because it would instead be going into private account investments. The idea is that in the long run, the financial strain would be eased as workers with private accounts retire with reduced benefits. But during the transition period, the government would have to come up with trillions of dollars. Unless taxes are increased, that money would have to be borrowed. What happens to disability benefits and survivors’ benefits? The president hasn’t said. Information from Times wire services was used in this report.
