Social Security reform - what are the current options?

Question

I am just wondering what types of social security reform are being considered to ensure that the working class are able to pay for recipient benefits in the future?

Answer 1

As mentioned the only plan proposed is the plan advocated by President Bush. The problem with the plan is that Congress currently spends all the money you contribute to social security, so if Congress allowed you to invest your money yourself the government would face a huge shortfall. The only real solution is to force Congress to weed itself off of the social security treasury and slowly cut benefits until we can afford something like the President proposed. Either that or raise taxes and watch the economy go down the tubes.

Answer 2

The only one on the table right now is (partial) privatization. This would mean that funds would be invested in non-government funded programs such as the stock market, corporate bonds etc. These are usually higher risk investments than T-Bills, which are low risk but also low yield.

There are some countries e.g. Chile where social secuirty has been transitioned into private programs and they have failed miserable because the private market is usually more volatile....many people in Chile lost their retirement when the stock market took a major dive...

Other countries with privatized SS programs also include the U.K. and Sweden....