Social Security Privatization Pros and Cons

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Social Security Privatization Pros and Cons

The Social Security program was originally created so that it could be able to take care of citizens who actually needed to be taken care of. It was almost like there was a big brother looking over Americans that were unable to take care of themselves for the most varied reasons such as mental illness, aging, injury and so on.

Right now, Social Security is causing a lot of problems in economic terms, and a big part of the U.S. debt is due to amounts of money taken out of the program. As such, the question was asked: should Social Security be privatized?

List of Pros of Social Security Privatization

1. It Can Improve The Program.
When Social Security was created back in 1935, it was an extremely efficient program that did really take good care of its citizens. As time goes by, the efficiency of the program keeps on going down. People are living longer and surviving issues they did not survive back then. By privatizing Social Security it is possible to roll in some more investment to improve the program.

2. It Will Prevent Budget Cuts.
Social Security is sinking and, as such, the only way to keep it afloat would be to get some money into it to change the system and to generally improve it. As such, money needs to be taken out of other departments to fit in the need.

List of Cons of Social Security Privatization

1. It Can Be Extremely Expensive.
We are talking about something that is there for any citizen who might need it and there si a very complex and organized system involved in this. The Reagan Administration actually tried to privatize Social Security but it didn’t turn out well, the costs were so heavy that taxes needed to be raised. Right now, the estimate costs to privatize Social Security would be of around $2 trillion.

2. Any Investment Is A Risk.
A lot of the plans to privatize Social Security involve investing into stock and bonds. These carry their risks, but even if they weren’t involved, any investment is a risk. The citizens of our country need to have a guarantee that they will be able to stay on their feet if things go wrong or after they retire.

3. It Would Add To The Bureaucracy.
If privatization were to happen, there would be a need to add new departments in order to ensure that things are being done properly and in order to ensure that Social Security doesn’t sink down again. This means that a lot of the money involved would also be spent in management fees and that is certainly not a positive thing.