Privatization Vs Social Security

978 Words 4 Pages
When people buy a product they pay knowing they will receive a good or service in return. When people pay taxes, they pay, knowing it 's the law, and receive some type of service in return. This is not the case with Social Security. Countless young people see this tax as something they are paying for but will never obtain anything in return. There has to be a better alternative; there is, privatizing Social Security.
Social Security is a program in which the government provides money to people who are unable to work because they are old, disabled, or unemployed. Social secretary is paid based by taxes the current workforce to pay current benefits. Benefits are regulated by members of the government and also include retirement and disability
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“If workers invested 12.4 percent of their earnings in a private retirement account yielding a moderate rate of return (say, 3 percent a year after adjusting for inflation), most would collect larger pensions than they can expect under the present Social Security system. Which in 2010, more than 57 million Americans will not automatically receive a Cost-of-Living Adjustment, but the Consumer Price Index (inflation) rose 3%, which shows that Social Security is not doing smart financial business practices with the consumer’s money to not allow a raise for …show more content…
One possibility is to gradually increase the portion of a worker 's salary that can be put into a retirement plan while doing likewise on the other end slowly limiting the amount the workers are required to pay into the Social Security taxes. This would increase the time need for a full switch over to a solely privatized system. However this would make it so one generation isn’t doomed to bear all of the switch. Since the year-to-year growth is so high the investments would offset any additional costs of transitioning the program over to private accounts.
As in other disciplines of government we are not the first ones to think of this type of solution. Britain did it, the workers that have the option to invest a portion of their payroll into private retirement plans. They received excellent returns and in Britain today, about three-quarters of all workers are enrolled in private pension plans. So did Chile, they privatized their social security in 1981, the citizens are required to put 10% of their salary into a personal retirement account. But they can invest more if they want to retire early. The poor and disable will still be covered by the government

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