Privatizing Social Security: The $10 Trillion Opportunity

As America moves into the 21st century, one public policy issue is becoming increasingly important: the need to reform Social Security. Our current Social Security system is acting as a drag on economic growth in two important ways. First, the payroll tax distorts the supply of labor and the type of compensation sought by workers. These losses are inevitable because of the low return implied by the pay-as-you-go character of the unfunded Social Security system. …

…tax increases and benefit cuts, we can move to a system based on mandatory, individually owned private savings accounts. Such a private savings program would solve Social Security's long-run financial problems without the necessity for either huge tax increases or benefit cuts. At the same time, it would yield enormous benefits to the economy. In short, privatizing Social Security can increase real incomes for everyone while ensuring a dignified retirement for future retirees. ------------------------------------------------------------------------ **Bibliography**