Wednesday, June 15, 2005

Privatizing Social Security is a MUST

The NCPA (National Center for Policy Analysis) has conducted a study on which is better, trying to maintain the current Social Security program, or switching to the privatization system that president Bush is trying to push forward.

The study shows that in order to sustain the current system (including benefits) we would need to increase the tax rate, which is currently at 12.4% to at least19.4% in the next 20 years.

I've even heard that privatization was done in a study on the poor working class, and paying the rate we do today, when that person retired, they actually got a VERY significant pay increase.

The biggest thing I see about this plan is that the people who are against this plan, are the ones who are set to benefit the most. It is statistically shown that a black male has the shortest lifespan in America, so naturally, they don't get back the same amount as the longest living person, a white female. Although with either system you don't expect to receive everything back you put in, the privatization has a higher percentage return on it, therefore you get more in your individual checks.

Another group opposed to privatization is the elderly. They are afraid that this is going to just cut off their social security immediately. That's not true. The plan is to keep the people close to retirement on the same plan, then shift it over at a specific time to people who have already started putting money in.

The really big winner though, is the people like me. 20 year olds who are just about to break out into the world. The study shows that "The average 20-year-old male can expect to pay $182,000 in taxes in excess of benefits received from all government entitlement programs." And it gets even worse for infants. "For babies born this year, 81 cents of every dollar they contribute to Social Security will never be matched by offsetting benefits."

Linked on: Basil's Blog