This is certainly a controversial topic and I have a lot of self-educating to do. A few items quickly come to mind, both pro and con:
1. I embrace the concept of “ownership” society so conceptually I am in favor of privatizing a portion of social security.
2. On the other hand, when I occasionally see some of the reality shows that take place on daytime TV, it causes me to question if these people could possibly manage their social security accounts.
3. Lot’s of the hysteria I hear could only be justified as true hysteria if more then 4% of the SS payroll tax was going to privatization. (this is confusing, the total payroll contribution is 12.5%, so the proposal is for slightly more than 30% of the combined contribution of both employer and employee).
4. Although investment options are not clear at this point, it’s probably safe to assume there will be broad based stock indices, some bond options and some type of cash/short term bond options. So once again contributions can be shielded from the dreaded equity markets and invested in bond indices or cash equivalents.
5. What I fear most from privatization is the unending whining from liberals when the equity markets decline for 2-3 years. History has demonstrated that politicians from both parties cannot control their spending habits. I’m sure after a year or two of declines in the equity markets they’ll be doing everything in their power to manipulate the market and get themselves re-elected.
The thought of liberal whining, combined with political gamemanship entering the stock market is enough to give this free market supporter at least a mild case of indigestion when considering social security privatization.
