Viewpoints on Privatization of Social Security In the News Again - circlevilleherald.com; Newsmax
Since the Social Security Board of Trustees issued the 2024 Report on the status of the Old-Age and Survivors and Disability Insurance trust funds earlier this month, the tempo has been building regarding the program’s future financial problems. Nothing in the report itself was really new, with perhaps the only significant change being the projected date for full depletion of the reserves. Depletion, of course, is the effect of current income levels being unable to meet the scheduled benefits being paid out; the deficit in 2023 was about $41 billion.
As expected, the airwaves are alight with warnings about the eventual depletion of reserves and the resulting benefit cut that would occur across the board, along with calls for Congressional action to reform Social Security to prevent what would be a dire situation. Among the ideas again surfacing is the suggestion to rethink how Social Security’s reserves–just under $2.8 trillion at year-end 2023–should be invested. Center for Urban Renewal and Education President Star Parker offers viewpoints on an approach to improving a return on the “investment” workers make in this part of their retirement picture, with a suggestion that “Individuals should be allowed to take ownership of the payroll tax and use the funds to invest in their own personal retirement account.” Read her post here.
And not to be undone, Sen. Tommy Tuberville, R-Ala. also weighs in on the privatization issue with a post today on newsmax.com. His post, which you can read in full here, references the comparative benefits that could have been achieved had Social Security contributions been invested in 401k accounts.
These suggestions are interesting but not new, and they’ve been visited multiple times in the past with the conclusion being to avoid the risk of stock market fluctuations. Previous articles on this point are quick to point out that the current investment approach–while legally mandated–enables the federal government to, in effect, “use” Social Security funds for other purposes while issuing Treasury bonds as collateral. This portion of the argument, naturally, leads many to propagate rumors about why Social Security has a long-term solvency problem, especially those who discount the viability of U.S. debt.