Becker of the Becker-Posner blog takes an vastly different angle at supporting Privatized Retirement Accounts. This is definitely something to think about:
Tax revenue from social security taxes at present exceed payments to retirees. This excess is counted as part of the growing Social Security Trust Fund, but in fact also enters into the consolidated Federal budget account, and helps reduce the reported spending deficit. Reported deficits during the past decade would have been much larger if social security was not running a surplus during this whole time period……
So the really strong arguments for privatization are that they reduce the role of government in determining retirement ages and incomes, and improve government accounting of revenues and spending obligations. All the other issues are really diversions because neither advocates or opponents of privatization are asking the most meaningful question about privatizing social security.
For economists, I think this is definitely something to think about. As a non-economist, I personally never would have. However, living in the political arena, my thought is that if they did pull the privatized portion of contributions out of the federal budget, the feds would just report the deficit anyway.
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