# Is social security privatization a good idea **URL:** \ **Category:** Great Debates\ **Created:** [December 8, 2004, 5:17pm UTC](https://boards.straightdope.com/t/is-social-security-privatization-a-good-idea/278771 "2004-12-08T17:17:04Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![jshore](https://avatars.discourse-cdn.com/v4/letter/j/b5e925/32.png) [@jshore](https://boards.straightdope.com/u/jshore)\ **Post date:** [December 8, 2004, 10:21pm UTC](https://boards.straightdope.com/t/is-social-security-privatization-a-good-idea/278771/21 "2004-12-08T22:21:28Z")
> [@pervert](#): > > _"As noted earlier, however, positive trust fund balances indicate the legal authority to pay benefits but not the budgetary resources to do so. Thus, they do not give as full a picture of the financial situation as annual outlays and revenues do. A limitation of simply targeting the summarized balance is that such an approach would not necessarily provide solvency to the Social Security system over the long term. Because outlays are projected to rise over time, a policy that increased revenues by 0.5 percent of GDP every year would still result in annual Social Security deficits beginning in 2024 and would only modestly reduce them in the long run. For example, the annual deficit under current law is projected to equal 1.3 percent of GDP in 2050 and 2.0 percent of GDP in 2100, so boosting revenues by 0.5 percent of GDP would still leave large deficits in those years._" Well again, this is all just coming back to the issue of whether the rest of government is going to continue borrowing from the S.S. trust fund forever or whether they are going to pay it back. No doubt, no longer using the S.S. trust fund as a piggy bank but actually paying back the money to it will require handling the budget outside of social security in a healthier manner. And, we were on track to do that until 2001. In 2000, we actually had a surplus large enough that we (just barely) didn’t have to borrow at all from the trust fund that year. However, then in 2001, a reckess President took office, and, coupled with the temporary downturn from the recession, our fiscal situation went to hell. > [@](#): > > 1. It seems dishonest of you and Krugman to suggest that the projected trust fund shortfall is “A problem of the rest of government, not social security”. You guys are the ones who complained that Bush’s figures regarding who got his income tax cuts did not include enough information about other forms of taxes. Now your saying that an expense which is such a large percentage of the federal budget does not count as to government funding problems. No one is blaming social security, BTW, we are just interested in the one program which accounts for so much of the outlays. This seems like a prudent thing when discussing the federal government’s future. No. I am being honest in noting that it is a real fiscal problem that needs to be dealt with. However, I want to avoid the dishonest claims that it is social security that is the root of this problem. Revenues have been collected for the social security system in a very regressive manner with the justification that this money is going to be used for social security…not that it will indefinitely be used to fund the rest of government. To blame the S.S. system for not allowing the rest of government to borrow from it indefinitely and never pay it back is kind of perverse. > [@](#): > > 2)The economic projections are not nearly as shaky as you like to claim in these threads. We are not talking about projecting the exact amount of GDP each year for 100 years. We are talking about measuring percentages of GDP which are not nearly as volitile. Well, it depends what you mean by volatile. Yes, it is true that some modifications are likely to be needed to keep the program solvent out for at least 75 years. But, these are not necessarily huge modifications. > [@](#): > > So, there is only a small amount of income diversion being discussed. Also, even that amount is not exactly “taken away from the social security system”. Any money in such an account would reduce the benifits recieved by that participant. If he died, or his account went bankrupt, then some money would have been diverted. But again, we are talking about a small percentage of a small percentage. Yes, but the point is that there is more debt incurred over the short run because that person won’t be collecting benefits for quite a while. So, the privatization doesn’t solve the problem that is often put up as the problem that we need to deal with which is the fact that we will no longer have a surplus in the S.S. system and will have to start actually paying back what we borrowed from it in another 15 years or so. What privatization does over the long-haul is dicier to predict. But, without a doubt, it will decrease the revenues for S.S. while not changing the amount paid out until those who have set up these private accounts start to retire. > [@](#): > > _"CBO projects that under current law, the government will be unable to pay scheduled benefits starting in 2053 and Social Security outlays will exceed revenues from payroll taxes and taxation of benefits beginning in 2019. CSSS Plan 2 would enable the government to pay the benefits scheduled under that law without transferring additional money from the general fund until 2036. From 2036 through 2050, transfers from the general fund would be required. After 2050, scheduled benefits would fall sufficiently that dedicated revenues would be large enough to pay them in full. "_ Well, okay, I will have to read this CBO report in more detail to understand how they arrive at their projections of what will happen in the long run (after 2050). And, of course, it would also be nice if they compared what other proposed solutions (like raising the cap on earnings that are taxed) would do. ---
**Author:** ![jshore](https://avatars.discourse-cdn.com/v4/letter/j/b5e925/32.png) [@jshore](https://boards.straightdope.com/u/jshore)\ **Post date:** [December 8, 2004, 10:35pm UTC](https://boards.straightdope.com/t/is-social-security-privatization-a-good-idea/278771/22 "2004-12-08T22:35:29Z")
**pervert** : Just a quick perusal of that CBO report shows that things are complicated because that paragraph you quoted regarding “CSSS Plan 2” includes not just a privatization of a part of the social security but also a reduction of benefits because the indexing of benefits would be changed from indexing via wages to indexing via prices (with certain offsets to the resulting decrease in benefits). It would be useful to understand the effects of the privatization and of the reductions in benefits separately. I don’t know if they do that in the body of the report. ---
**Author:** ![pervert](https://avatars.discourse-cdn.com/v4/letter/p/bbe5ce/32.png) [@pervert](https://boards.straightdope.com/u/pervert)\ **Post date:** [December 8, 2004, 10:48pm UTC](https://boards.straightdope.com/t/is-social-security-privatization-a-good-idea/278771/23 "2004-12-08T22:48:20Z")
> [@jshore](#): > > […]it will require handling the budget outside of social security in a healthier manner. And, we were on track to do that until 2001. In 2000, we actually had a surplus large enough that we (just barely) didn’t have to borrow at all from the trust fund that year. However, then in 2001, a reckess President took office, and, coupled with the temporary downturn from the recession, our fiscal situation went to hell. Well, lets get this in perspective. [This CBO summary suggests:](http://www.cbo.gov/showdoc.cfm?index=3662&sequence=0) _“Spring 2002 brought an “April surprise” of a type that had not been seen for roughly a decade: federal revenues substantially lower than expected, a reversal of the pattern that characterized the late 1990s. Even though the current fiscal year is nearly over, revenue forecasters have substantially revised their expectations of how much fiscal year (FY) 2002 revenues will be as a consequence of April, May, and June receipts. A fiscal year that began with a forecast of a budget in approximate balance now faces a deficit of $157 billion, $103 billion of which results from revenues that are lower for reasons other than the effects of legislation. That latest revision comes on top of downward revisions from last August and January. This revenue and tax policy brief reviews what forecasters currently know about the recent falloff in receipts and the likely implications for projections of revenues in years beyond fiscal 2002.”_ This looks like 1/3 against the President and 2/3rds against the economy. Additionally, it looks like the change did not occur until after the legislation took effect. I certainly understand that President Bush’s spending habits and tax preferences did not necessarily help the economic situation, but it seems, again, disengenuous to lay the blame on his policies like you did. > [@](#): > > No. I am being honest in noting that it is a real fiscal problem that needs to be dealt with. However, I want to avoid the dishonest claims that it is social security that is the root of this problem. Revenues have been collected for the social security system in a very regressive manner with the justification that this money is going to be used for social security…not that it will indefinitely be used to fund the rest of government. To blame the S.S. system for not allowing the rest of government to borrow from it indefinitely and never pay it back is kind of perverse. But this is not what anyone is doing. No one has said that social security is to blame because it will not produce surpluses forever. What they have said is that a budgetary problem is looming, and one of the largest items on the budget has to be looked at in order to solve it. Its really that simple. > [@](#): > > Well, it depends what you mean by volatile. Yes, it is true that some modifications are likely to be needed to keep the program solvent out for at least 75 years. But, these are not necessarily huge modifications. Sometimes they are, though. When the number of workers to the number of benificiaries falls low enough, we may face a pretty significant increase in taxes or borrowing. If that happens do you really want to tell that generation of workers, “Trust us we are the government. We’ll tax your kids to pay for your retirement as well.” And hope they continue to play along? I don’t know. It may work. I’d rather we include some other incentive though. > [@](#): > > Yes, but the point is that there is more debt incurred over the short run because that person won’t be collecting benefits for quite a while. So, the privatization doesn’t solve the problem that is often put up as the problem that we need to deal with which is the fact that we will no longer have a surplus in the S.S. system and will have to start actually paying back what we borrowed from it in another 15 years or so. But I don’t think this is true. We are talking about a law which cannot go into effect for some time. It will only affect a few percentage of the SS payroll taxes. > [@](#): > > What privatization does over the long-haul is dicier to predict. But, without a doubt, it will decrease the revenues for S.S. while not changing the amount paid out until those who have set up these private accounts start to retire. But this is the whole point. We cannot reduce the amount paid out to those retired or about to retire without substantial hardship on them. That debt is ours to pay regardless. Why not modify the system so that those paying said debt have more faith that the system will be there to assist them should they need it. A tiny private account might be just such a step. > [@](#): > > Well, okay, I will have to read this CBO report in more detail to understand how they arrive at their projections of what will happen in the long run (after 2050). And, of course, it would also be nice if they compared what other proposed solutions (like raising the cap on earnings that are taxed) would do. Well, unfortunately, they only look at the projections of one specific plan. It includes Individual Accounts, benifits changes, and transfering money from the general account to Social Security. They may have another report, however which looks at moving the cap. ---
**Author:** ![jshore](https://avatars.discourse-cdn.com/v4/letter/j/b5e925/32.png) [@jshore](https://boards.straightdope.com/u/jshore)\ **Post date:** [December 8, 2004, 10:53pm UTC](https://boards.straightdope.com/t/is-social-security-privatization-a-good-idea/278771/24 "2004-12-08T22:53:25Z")
Actually, if you look at Table 1A of the CBO report, you will see that over the long term the vast majority of the budgetary benefit comes from the change in benefit calculation to price indexing, with only a small amount coming from having the “individual accounts”. Over the short and medium term, of course, the individual accounts actually have a negative impact on the budget. As they explain in the text: > [@](#): > > The provision with the largest total budgetary effect is the switch to price indexing of initial benefits. Over long periods, real GDP generally grows at the same pace as real wages. If benefits grew at the rate of prices, they would continuously shrink relative to GDP. The savings would be offset slightly by lower revenues from the taxation of benefits. The effect of this provision compounds over time. In 2025, it would reduce the balance by 0.38 percent of GDP; in 2085–when scheduled outlays would be 6.7 percent of GDP under current law–it would reduce the balance by over 3 percent of GDP. ---
**Author:** ![Mr.Biggles](https://avatars.discourse-cdn.com/v4/letter/m/839c29/32.png) [@Mr.Biggles](https://boards.straightdope.com/u/Mr.Biggles)\ **Post date:** [December 8, 2004, 11:03pm UTC](https://boards.straightdope.com/t/is-social-security-privatization-a-good-idea/278771/25 "2004-12-08T23:03:39Z")
> [@Debaser](#): > > These fears are preyed upon by those against the idea of privatizing social security, but they are really unfounded. > > First of all, we are talking about very long investment timelines. If you are looking at a 20 year timeline of the stock market or longer it is historically impossible to lose money on your investment. (I’m talking about index funds that are holding stocks of the entire market.) > > So, for a younger worker like me (I’m 28) who is 30-40 years away from retirement, I’m virtually guaranteed to have gains and large gains at that. The odds that I will lose money in the market over that long a timeframe are about the same that the federal government will collapse by then and not be paying back it’s T-Bills. In the financial world, this is about as far fetched a scenario as it gets. > > The notion of people losing all thier money, or even half their in a privatized plan is simply not realistic and can be prevented. Seems I found those fears out. I just lost half of my investment in a Mutual fund. True, I am not “just about” to retire, but it has cut severely into what I had hoped to have by now. How will I regain those years of lost money? Plus, I am a lot closer to retirement than you too. Doesn’t anybody realize that Social Security is totally solvent until 2052? Which is well within your (Debaser) timeline. Up till then, 100% will be paid out to recipients, after that it’s 80%. You are forgetting one big part of this equation: the possible financial collapse of America. It’s quite obvious you are not taking the debt seriously, nor the trade deficit. For Bush to privatize, he will need to borrow several more BILLIONS of dollars. You can sit and believe that they won’t cut the cord, but with the possibility of oil going the way of the Euro and/or if Asia decides the dollar is no longer viable…well all bets are off. ---
**Author:** ![jshore](https://avatars.discourse-cdn.com/v4/letter/j/b5e925/32.png) [@jshore](https://boards.straightdope.com/u/jshore)\ **Post date:** [December 8, 2004, 11:11pm UTC](https://boards.straightdope.com/t/is-social-security-privatization-a-good-idea/278771/26 "2004-12-08T23:11:41Z")
> [@pervert](#): > > This looks like 1/3 against the President and 2/3rds against the economy. Additionally, it looks like the change did not occur until after the legislation took effect. I certainly understand that President Bush’s spending habits and tax preferences did not necessarily help the economic situation, but it seems, again, disengenuous to lay the blame on his policies like you did. I am not blaming his tax cut (& some spending) policies for producing the majority of the problem in that one year (2002). Of course, the economic downturn produced most of the immediate problem. That was true especially since the tax cuts were phased in over time and were thus rather modest at first. However, the question is how much they contribute to the structural deficit over the long term, particularly once they are totally phased in. On that score, [here](http://www.ctj.org/pdf/def0104.pdf) is a summary from CTJ using CBO data: > [@](#): > > Recent estimates from the Congressional Budget Office (CBO) show that President Bush remains on track to add more than $10 trillion to the national debt by 2014, under his current borrow-and-spend policies. Most of that enormous increase in debt stems from the President’s tax cuts, which will cost $5.5 trillion from fiscal 2002 through 2014 if he succeeds in making them permanent. > > … > > Tax cuts explain most of the debt build-up. Under current policies, the federal government, excluding Social Security, is expected to borrow a total of $10.3 trillion over the fiscal 2002-14 period. More than half of that borrowing—$5.5 trillion—will stem from the President’s tax cuts, if they are extended. > > # The already enacted Bush tax cuts are projected to add $2.6 trillion to the government’s debt over the 2002-14 period. > > # Extending the tax cuts past their current “sunset” dates, as the President proposes, would more than double the cost of the Bush tax cuts, requiring $2.9 trillion in additional borrowing over the upcoming decade. > > Defense and homeland security increases have also boosted debt. Higher spending on defense and homeland security is the second largest factor in CBO’s $10.3 trillion borrowing projection, explaining 22 percent of the total. That considerably less than half as important in explaining our increased debt, however, as are the tax cuts. > [@pervert](#): > > But I don’t think this is true. We are talking about a law which cannot go into effect for some time. It will only affect a few percentage of the SS payroll taxes. I refer you to the CBO Table 1A again and accompanying text regarding the budgetary effect of the individual accounts. (The first date that they look at in the table is 2025.) > [@](#): > > Well, unfortunately, they only look at the projections of one specific plan. It includes Individual Accounts, benifits changes, and transfering money from the general account to Social Security. They may have another report, however which looks at moving the cap. As noted in this post and my immediate previous one, the CBO does in fact break down the budgetary effects of each provision (with an additional number representing “interactions across provisions” but that amount is fairly small at least in comparison to the amount of the major effect…which is the indexing change). ---
**Author:** ![Wesley\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wesley_clark/32/20581_2.png) [@Wesley\_Clark](https://boards.straightdope.com/u/Wesley_Clark)\ **Post date:** [December 8, 2004, 11:16pm UTC](https://boards.straightdope.com/t/is-social-security-privatization-a-good-idea/278771/27 "2004-12-08T23:16:18Z")
> [@Mr. Biggles](#): > > Doesn’t anybody realize that Social Security is totally solvent until 2052? Which is well within your (Debaser) timeline. Up till then, 100% will be paid out to recipients, after that it’s 80%. Thats not a huge deal. I have looked it up and if you make 30,000 a year and retire at 65 you’ll get $1008 a month, 80% of that is only a $200/month cut which will not lead to the destruction of the retirement population by anymeans since the retired have other sources of income like pensions, personal investments, home equity, work and family. Hmm, I should retire in about 2049 assuming I retire at 70 so this will happen just as I retire. ---
**Author:** ![tnetennba](https://avatars.discourse-cdn.com/v4/letter/t/7993a0/32.png) [@tnetennba](https://boards.straightdope.com/u/tnetennba)\ **Post date:** [December 8, 2004, 11:31pm UTC](https://boards.straightdope.com/t/is-social-security-privatization-a-good-idea/278771/28 "2004-12-08T23:31:11Z")
Social Security isn’t in trouble. It’s a lie by GOP so they can help their rich friends plunder the coffers of social security. They’ll say it’s just a bit at first, but before you know your mandatory investment will be off in the Cayman Islands with the greedy bastards who took it from you. Too bad it won’t only affect the rubes that voted for Bush. They deserve to eat dog food in their dotage, but not people with half a brain that know we can’t trust those bastards with our money. ---
**Author:** ![pervert](https://avatars.discourse-cdn.com/v4/letter/p/bbe5ce/32.png) [@pervert](https://boards.straightdope.com/u/pervert)\ **Post date:** [December 9, 2004, 12:19am UTC](https://boards.straightdope.com/t/is-social-security-privatization-a-good-idea/278771/29 "2004-12-09T00:19:50Z")
> [@jshore](#): > > Actually, if you look at Table 1A of the CBO report, you will see that over the long term the vast majority of the budgetary benefit comes from the change in benefit calculation to price indexing, with only a small amount coming from having the “individual accounts”. Over the short and medium term, of course, the individual accounts actually have a negative impact on the budget. Yes, to all this. But the negative impact is also correspondingly small. I really don’t think that any of President’s Bush’s proposals amount to privatizing social security. They include some small amount of Individual Accounts. But again, these are really very small changes. The idea of benifit indexing seems much more intriquing to me. I’m not sure I understand it, but it seems to be some sort of indexing benifits to inflation instead of real wages. I wonder why the discussioin centers on the Individual Accounts and not this proposed change? ---
**Author:** ![pervert](https://avatars.discourse-cdn.com/v4/letter/p/bbe5ce/32.png) [@pervert](https://boards.straightdope.com/u/pervert)\ **Post date:** [December 9, 2004, 12:23am UTC](https://boards.straightdope.com/t/is-social-security-privatization-a-good-idea/278771/30 "2004-12-09T00:23:31Z")
> [@jshore](#): > > II refer you to the CBO Table 1A again and accompanying text regarding the budgetary effect of the individual accounts. (The first date that they look at in the table is 2025.) Upon re reading your post and my response, I see that you were correct on this point. When you complained that privatization would not solve these fiscal problems, I read that the president’s proposal would not solve them. My bad. I should have simply said that the effect of the small amount of privatization would also be small. ---
**Author:** ![tnetennba](https://avatars.discourse-cdn.com/v4/letter/t/7993a0/32.png) [@tnetennba](https://boards.straightdope.com/u/tnetennba)\ **Post date:** [December 9, 2004, 12:32am UTC](https://boards.straightdope.com/t/is-social-security-privatization-a-good-idea/278771/31 "2004-12-09T00:32:38Z")
But the small amount of privatization is to establish a precedence to fork all of our money over to the bastards, don’t you see? They’ll say the 10% isn’t working, and make it 80, and then it’ll all vanish a puff of smoke. ---
**Author:** ![pervert](https://avatars.discourse-cdn.com/v4/letter/p/bbe5ce/32.png) [@pervert](https://boards.straightdope.com/u/pervert)\ **Post date:** [December 9, 2004, 12:33am UTC](https://boards.straightdope.com/t/is-social-security-privatization-a-good-idea/278771/32 "2004-12-09T00:33:30Z")
Fine. Then cite? ---
**Author:** ![Reeder](https://avatars.discourse-cdn.com/v4/letter/r/c6cbf5/32.png) [@Reeder](https://boards.straightdope.com/u/Reeder)\ **Post date:** [December 9, 2004, 12:48am UTC](https://boards.straightdope.com/t/is-social-security-privatization-a-good-idea/278771/33 "2004-12-09T00:48:08Z")
> [@](#): > > There will be a large temporary shortfall. Large? The number I’ve seen is Two **Trillion** dollars. That’s trillion with a T. How does Bushco propose to pay for it? By borrowing it of course. Think our deficit is high now? :rolleyes: ---
**Author:** ![pervert](https://avatars.discourse-cdn.com/v4/letter/p/bbe5ce/32.png) [@pervert](https://boards.straightdope.com/u/pervert)\ **Post date:** [December 9, 2004, 1:00am UTC](https://boards.straightdope.com/t/is-social-security-privatization-a-good-idea/278771/34 "2004-12-09T01:00:01Z")
> [@Reeder](#): > > Large? The number I’ve seen is Two **Trillion** dollars. That’s trillion with a T. > > How does Bushco propose to pay for it? > > By borrowing it of course. > > Think our deficit is high now? Can you explain where you might have seen this? None of the numbers I am familiar with suggest anything like a 2 trillion dollar shortfall in Social Security in the near term. The shortfall is much larger than that in the longer term under the current law. But even that is 30 to 40 years out. ---
**Author:** ![rocking\_chair](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/rocking_chair/32/2918_2.png) [@rocking\_chair](https://boards.straightdope.com/u/rocking_chair)\ **Post date:** [December 9, 2004, 1:10am UTC](https://boards.straightdope.com/t/is-social-security-privatization-a-good-idea/278771/35 "2004-12-09T01:10:07Z")
rather than privatize s.s. i would like to see it tied to a lottery. the money taken in by people buying tickets would more than fund s.s. and medicare as well. the money that the powerball brings in, funds many social service in the states that are in the pool. go all 50 states and that is quite a big money pool. the procedes would only be used for social security and if possible medicare. as the money comes in more services can be offered. as posters above mentioned as of now you get s.s.: if you retire or are disabled. your spouse and any children get benefits when you pass or retire. child benefits from parents stop at high school now (reagan changed that). services that could be offered by tying in a lottery, would be to reinstate child benefits through (4 year) college or trade school. enlarging medicare to any american that is not covered by private health insurance. i can only imagine what the jackpots would be in a 50 state pool lottery… ---
**Author:** ![tnetennba](https://avatars.discourse-cdn.com/v4/letter/t/7993a0/32.png) [@tnetennba](https://boards.straightdope.com/u/tnetennba)\ **Post date:** [December 9, 2004, 1:12am UTC](https://boards.straightdope.com/t/is-social-security-privatization-a-good-idea/278771/36 "2004-12-09T01:12:37Z")
> [@pervert](#): > > Fine. Then cite? I’m not sure exactly what you want a cite for. Do you need a cite proving that there is privatization afoot, or do you need a cite showing that recent capitalists have been known to lie, cheat, and steal? What exactly about the combination of giving away my hard-earned money to people I don’t and shouldn’t trust requires a cite to someone with moderate engagement with the world? Do you think that there are no ulterior motives to privatizations? Those GOP guys, they’re just really looking out for me, aren’t they? So they give my hard-earned money, which I was obligated to give them, and give it all to some shady Ken Lay type, and I need a CITE to not be fine with that? Google “social security privatization scam,” and you’ll get a 100,000 links. ---
**Author:** ![tnetennba](https://avatars.discourse-cdn.com/v4/letter/t/7993a0/32.png) [@tnetennba](https://boards.straightdope.com/u/tnetennba)\ **Post date:** [December 9, 2004, 1:14am UTC](https://boards.straightdope.com/t/is-social-security-privatization-a-good-idea/278771/37 "2004-12-09T01:14:16Z")
I think anyone supporting privatization of SS should be obligated to pay everyone back after our money is lost or stolen. If it’s not lost or stolen, you get to gloat. Fair? ---
**Author:** ![Malodorous](https://avatars.discourse-cdn.com/v4/letter/m/e47774/32.png) [@Malodorous](https://boards.straightdope.com/u/Malodorous)\ **Post date:** [December 9, 2004, 1:17am UTC](https://boards.straightdope.com/t/is-social-security-privatization-a-good-idea/278771/38 "2004-12-09T01:17:32Z")
> [@pervert](#): > > Can you explain where you might have seen this? None of the numbers I am familiar with suggest anything like a 2 trillion dollar shortfall in Social Security in the near term. The shortfall is much larger than that in the longer term under the current law. But even that is 30 to 40 years out. Reeder’s not talking about the shortfall between current revenues and current projected payouts, he’s talking about the shortfall caused by pulling money out of the current system (which would normally go to pay current benefits, which will still need to be paid) and putting it into the privatized accounts. If we pull out 5% of SS payments, then the gov’t will have to make up a difference equal to 5% of current SS revenues. [Linkage courtesy of **Fear Itself** over in the other SS thread.](http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=7009385). It estimates this shortfall coming to 1-2 trillion under the current limited (and not very well detailed) Bush plan. And yes I am participating in both SS threads so I can steal other peoples cites and look smart 🙂 ---
**Author:** ![Wesley\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wesley_clark/32/20581_2.png) [@Wesley\_Clark](https://boards.straightdope.com/u/Wesley_Clark)\ **Post date:** [December 9, 2004, 1:19am UTC](https://boards.straightdope.com/t/is-social-security-privatization-a-good-idea/278771/39 "2004-12-09T01:19:52Z")
> [@Reeder](#): > > Large? The number I’ve seen is Two **Trillion** dollars. That’s trillion with a T. > > How does Bushco propose to pay for it? > > By borrowing it of course. > > Think our deficit is high now? > > :rolleyes: They are also considering eliminating the employee health deduction and income tax deduction to help pay for it, so taxes would go up by $200 billion a year. [http://www.washingtonpost.com/wp-dyn/articles/A58554-2004Nov17\_2.html](http://www.washingtonpost.com/wp-dyn/articles/A58554-2004Nov17_2.html) ---
**Author:** ![Ludovic](https://avatars.discourse-cdn.com/v4/letter/l/7ab992/32.png) [@Ludovic](https://boards.straightdope.com/u/Ludovic)\ **Post date:** [December 9, 2004, 2:07am UTC](https://boards.straightdope.com/t/is-social-security-privatization-a-good-idea/278771/40 "2004-12-09T02:07:47Z")
I think Social Security privatization would be an immense boon…to the securities industry. If the $2 Trillion is going to be missing from the government’s pockets, it’s not gonna wind up in passport savings or money markets: it’s gonna be in stocks and bonds. And once the stock and bond holders realize there are a lot more dollars competing for their securities, guess what’s gonna happen to their yields? Yup. Compared to anyone investing before this immense influx of money, investors in that time era, SS or not, will get the royal screw job. Granted, even WITH this plummet in yields, it will still beat the yields for the SS trust fund, but is it worth it to get sub-optimal investment income while at the same time jacking up our national debt? (Not to mention the chances of regulation, mismanagement, or fraud lopping off another large share of the SS privatization fund yields.) Despite all this, I think it would be a good thing to try a bit of SS privatization…if we had a surplus. After all, since I am pretty young, I don’t think I’ll ever see any of my money: I’m willing to just get it all back in one lump sum and wash my hands of the whole deal. i’m not willing to have it transformed into an investment-like device which will cost too much to administer and will yield too little and which I STILL won’t be able to touch for another 30-40 years. [Previous page](https://boards.straightdope.com/t/is-social-security-privatization-a-good-idea/278771.md?page=1) [Next page](https://boards.straightdope.com/t/is-social-security-privatization-a-good-idea/278771.md?page=3)