Garrett Summers | United States
The Federal government’s spending is out of control. The current US debt is $22 trillion and every year we add about another $1 trillion. Shrinking the size of the federal government means shrinking its power. Money is power, so decreasing the amount of money and economy the government controls should be the first place to start. Social Security is the number one expenditure of the federal government. Every year, about $1 trillion dollars of the budget goes towards Social Security. Privatizing Social Security would nearly remove the annual deficit. It would also return the power and responsibility of the individual to manage their own retirement.
Why Should We Privatize?
Currently, the government issues a payroll tax to fund Social Security. The money the government takes now pays for those currently receiving benefits. The problem with this is that when large sections of the population attempt to retire at the same time (like we are seeing with the Boomers), it puts a strain on the system. There is not enough money. It is estimated that Social Security will deplete its reserves by 2034. This means those of us that are paying into Social Security now and will not be dead by 2034, will not receive the benefits we have paid for. Some suggest other solutions, such as increasing the tax or retirement age. Unfortunately, these solutions will be only temporary because the population is expected to grow and live longer. This is why privatization is necessary because we will reach this limit again.
Social Security is also an outdated idea. Social security was created during the Great Depression. During the Great Depression, those too old to work were experiencing a real crisis. They had no way to provide for themselves and their children and/or grandchildren were likely out of work. This is why the New Deal decided to have those working now pay for those currently receiving benefits. They did not have time to build up a savings then dish out the benefits. The US is no longer in these dire circumstances, the economy is the strongest it has ever been. It is time to have the citizens take responsibility for their own retirement.
How Do We Privatize Social Security?
Privatizing Social Security would simply mean moving funds into private retirement accounts and abolishing Social Security benefits. Those currently retired or approaching retirement would have priority over those of us that are younger and will receive more from the privatization. Currently, Social Security does not tax any income over $132,900. This was raised this year (2019) in order to help extend Social Security’s life.
This is not only because the government will be sending out lump sums but also to cover the administration cost of doing this. Once we privatize Social Security, the tax will disappear. This will put more money back into pockets of Americans (and hopefully into private retirement accounts) and into the economy.
Privatization will prevent those of us currently paying into Social Security from losing out on that money totally. It also removes the government from one aspect of our lives. Retirement should be a personal, financial decision. It would also slow down the out of control spending of the federal government and reduce the annual deficit. This change is necessary.
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