Is there a legit argument for privatization of social security?

@badminton You hit on the two key issues to keep SS solvent and working. 👍️

@badminton It would be tough for Reagan to be the first when Johnson did it back in the 60s for Vietnam.

Raiding the Social Security Trust Fund was a precedent set in 1968 by another progressive president, Lyndon B. Johnson, to help pay for the Vietnam War. To date, the federal government has borrowed over $2 trillion from the Social Security Trust Fund to spend on other programs.

Reagan allowed social security to be taxed.

Wall Street is handling more money in retirement plans than will ever be in social security, not saying that the market can't crash but as long as you stick with stable returns and diversify, you can be relatively safe. Even after the crash way back in 1929, only the real players working with borrowed money or buying on the margin as it was called really took a shellacking.

@Roadsterrider If SS had been privatized in 2009, imagine what would have happened to people already retired when their retirement plunged to 1/3 its former value in the Bush Recession? Many people wouldn't have had enough to live on. No, Wall Street shouldn't be anywhere near people's retirement money. They have proven time and time again that they can't be trusted.

@windinhishair Social security is all in one place now. It is in the hands of the government. That is all, all that is necessary to spend, not what is there, but also what may be there in the future is for congress to authorize the spending of it. There is nothing to stop them from spending it. If a portion of social security was privatized, it would not be in one spot and it would not be allowed to just be spent. It may be invested unwisely but the investments are owned by the investor, they just can't disappear. The fiasco with Madoff, greedy people gave him their money and he was a fraud, and he went to prison over it. Investment firms don't just stick money in a bank somewhere, they invest in a very diverse field of stocks, instead of there being one pile of cash and a checkbook in Washington, the part privately invested would be scattered out in a thousand different firms and a million different stocks. I watched my 401 decrease by about 60% in 2008, it took about a year for it to reach it's former level. Unless there is another great depression it isn't a problem for the 401, it may take a little longer to recover but it will come back. If there is a great depression and mass unemployment, where is the government going to get cash for social security, they aren't, if there is another depression, that money is already spent, social security is paid from funds from people paying in now. My point is that I would have rather had that money growing at 3 times the rate I would get back. A major depression with resulting job loss would shutdown money coming in for SS.

@Roadsterrider The bottom line is that Wall Street investment firms cannot be trusted to handle Social Security appropriately. They've proven it time and time again. Millions would have been devastated in the Bush Recession of 2007-2011, with no way to save their homes, pay their bills, or in some cases pay medical bills or have enough to eat. It isn't a risk we can or should take. Lift the limit on income subject to SS tax, pass legislation to prevent borrowing from the fund, and pay back what has been borrowed (we can cut military spending to make up the difference).

@windinhishair It isn't an acceptable risk for you, that's great, you want to pay in and collect per the rules set up for it. Personally, I think I am getting screwed by the government by being forced to pay into it while they piss it away on whatever they want to spend it on. It is a risk I would take. I am being forced to comply with something that I feel is substandard. And there is a prejudice, if you work for the railroad, you don't pay into social security, because the railroad has it's own retirement plan. I have a retirement plan, I should be able to take the 7% that goes to social security and put it back into my own plan. What is too big of a risk for you isn't so much of a risk for others.

@Roadsterrider Defined benefit plans are almost always underfunded. I worked for a company that had one for some of their employees. Then they defaulted on the plan with the concurrence of the regulatory board and paid out about half of what was promised. I knew someone who worked there for over 40 years to ensure a good retirement, and two weeks after they retired, found out they were getting a little under 50% of what they had worked their life for. Too bad. They had to take part time jobs to supplement their wonderful retirement.

The risk of non-governmental retirement is too high for most people. And when it fails, like it would have ten years ago, it fails spectacularly. As a taxpayer, I don't want to be put in the position of having to pay for their decision when they can no longer live on what they make.

[quote] I am being forced to comply with something that I feel is substandard. [/quote] Happens all the time. I am being forced to live under an EPA that works for businesses, not for public health. And a Department of Interior that believes that public lands are for private gain, while stripping away land protections.

@windinhishair If there are economic problems, that is one thing, just poorly managing something is something else. taking money for one thing and spending it on something else is fraud, if you or I did it, we would be in jail. The average social security payment equals about $17,600 a year, $25K or less is below the poverty level, we are already paying for people with poorly managed retirements via SS. If not through public assistance, then through SSDI and Medicaid. The better off retirees are, the less they cost society.

@Roadsterrider Which is why we cannot afford to let Wall Street rip off retirees and leave people hopeless during major recessions.