Privatization Of Social Security And Privatization Essay
ENG 101 B01
Privatization of Social Security
Social Security is a payroll tax that funds the Old Age Survivors and Disability trust funds (Van de Water). When eligible, employees can receive benefits from these trust funds. Each generation supports the previous retirees. Rather than investing in the trust funds, workers argue that they should be permitted to privately invest their money. Privatization is investing money into personal accounts, stocks or bonds. Privatization is a costly, complicated, and undependable system that won’t be efficient. The fluctuating stock market, significant cost of preserving personal accounts, and reductions in social security benefits make privatization problematical. Social security benefits could lead to a great standard of income; sometimes the only source of income (Baumgartner). It is very important that these investments are completed responsibly. Privatization could make it difficult to retire restfully because of the fluctuating stock market (Baumgartner). Investing in the stock market is very risky; a person with great knowledge of the stock market will have a good chance of receiving higher income. However, social security protects contributors from potential risky investments and shameless stock brokers.
The social security trust funds are safely managed by The Department of Treasury. The Treasury invests the surfeit in Treasury securities and can redeem bonds whenever they need…