Opponent View: The Generational Equity Scam

The question of whether or not social security should continue or if the system should undergo privatization has continued to be a hot topic of discussion for taxpayers and elected officials. In part one of a two part series on generational equity we will look at the pros of privatizing social security. In part two of this series on generational equity, we will look at the cons of privatizing social security.

The problem is unambiguous; social security as it stands today will not be able to support the generations that follow the baby boomers. The younger generations are paying for the retirement of the older. However, according to Linda Feldmann of the Christian Science Monitor, when it comes time for the younger generations to retire, the cost of social security is expected to grow to levels that cannot be met by the programs currently in place.

Privatization of the social security system stands strong as a proposal for social security reform. In George W. Bush’s run for presidency in 2000, he proposed partial privatization. The Bush Administration worked toward a system of privatizing social security, and although unsuccessful, President George W. Bush cited it as his biggest domestic achievement.

The Concord Coalition supports a mandatory system of funded and personally owned retirement accounts. Some of the pros of privatization are: morality, avoidance of financial crisis, surpluses in the federal budget, increase in national savings and ultimately economic growth.

Moral – According to Daniel Shapiro’s article for the CATO Institute, privatizing social security is a moral issue. He states, “A privatized Social Security system gives individuals more freedom to run their lives, is fairer, provides more security, and creates less antagonism between generations, fostering a greater sense of community.”

Avoidance of Financial Crisis – The crisis of running out of money to cover social security expenses for the younger generations will be avoided. No longer will young generations depend on social security checks, rather they will be funded through personal investments and savings.

Surpluses in Federal Budget – The cost of transitioning retirement plans will need to be offset. When that happens there will be surpluses in the federal budget that will continue to grow. This will yield tax reduction or national debt reduction.

Increase in National Savings & Economic Growth – All of these things work together to create large economic growth in the U.S. With invested dollars into retirement accounts, “national investment, productivity, wages, jobs, and economic growth” would increase, producing economic growth.