Posted By:
CoreyRS,hanus"And I do think Social Security should be privatized...people need to take responsibility for their own financial future and I don't need the Government taxing me for a system I have no use for."
That statement used to reflect precisely my sentiments, and to some degree still does. But if you do privatize social security, what will inevitably happen is that a number of people will blow it. They will end up losing all or most of their investments and society will then face the choice of letting them rot in their old age or have Joe taxpayer bail them out. Both scenarios seem quite unappealing.
The middle ground I have come to support is some system of letting people forgo the option of collecting social security provided they invest the taxes they would otherwise pay into social security in government-approved investments. The greatest impediment to the implementation of such a system is the fact that to a large degree social security is fiction. Think of it for a minute. As the baby boomers age and become eligible to collect social security, there simply will not be enough people paying into the system to support those taking from it without either a staggering tax increase or a reduction in benefits, or some combination of the two. Should there be a reduction in benefits, IMO the more likely of two options to be implemented, there will probably be a means test to determine how much a person receives. The more well-off the person, the less he/she will receive. So that is why I say social security is a fiction. Government can't afford to let people privately invest their social security taxes because if they did then those people would end up getting their fair share of the proceeds of their social security taxes, regardless how well-off they are. And that is something the system I fear simply will not be able to afford to let them do.