Should we privatize social security benefits?
Social Security is a social welfare service concerned with protection against socially recognized conditions, including poverty, old age, disability and unemployment. The system is structured like an insurance scheme, where both employees and employers are imposed to pay Federal Insurance Contributions Act (FICA) tax to fund the system. The current United States Social Security System is a pay-as-you-go program. The revenue that the federal government raises each year for social security benefits is paid out that same year to beneficiaries. Social insurance is an essential feature to guaranty a minimum standard of living to all citizens, but the current system has also some flaws that are indispensable to repair. In 2005 president Bush raised awareness of the critical situation of the United States social security system. “Social Security is sound for today’s seniors and for those nearing retirement, but it needs to be fixed for younger workers – our children and grandchildren. The government has made promises it cannot afford to pay for with the current pay-as-you-go system” the US president stated. I believe that partial privatization of the existing social security system is absolutely necessary in order to guarantee adequate benefits to future generations. The following three arguments led me to this conclusion.
Social Security essentially represents an intergenerational "social contract," whereby the next generation implicitly promises to pay for the retirement of the previous generation. But the future generations will not be able to stick to this contract. In 1950, there were 16 workers to support every one beneficiary of Social Security. Today, there are only 3.3 workers supporting every beneficiary. And ...