It's a Pyramid Scheme 

Why is it that the government is always allowed to do what we in the private sector cannot? Whats more, why is it that there will always be people ready to apologize for the government's actions in that regard? Recently I made a brief comment about the current Social Security debate, and got one comment on it. Here is my response. Carl brought up a lot of one liner issues which I will try to answer with more than one line myself.

The Government Uses that Money: I actually find it interesting that this was mentioned. Most people who talk about Social Security try to quietly make you forget that it's really just a tax. The government takes your money, writes down what they took, and then spends it on whatever they damn well please. It doesn't get invested. It doesn't get saved away wisely for you either. It's spent on whatever whim some Congressman or Senator deems worthy. If you were looking at perspective investment firms for your retirement, and one of them told you that they'd "invest" your money in studies on the toe nail cutting habits of the elderly, or something else just to send money back to some constituents, would you willingly give them your money? What's the rate of return on those things? Is there one? Do they even care?

You Could Lose Your Money in the Stock Market: Yeah, you could. What's your point? First of all, I find investing in the stock market a hell of a better bet than investing in the government. At least when I invest in the stock market, I have a reasonable chance of seeing some sort of return on my money. The only way I can guarantee a return from the government is under two circumstances. One, they raise payroll taxes on current workers. Two, our population grows enough to support a retiring population that continues to live longer. I personally don't think the first is fair, and I don't want to depend on the second. Besides, who said you had to invest in the stock market? Put you could put your money in utilities if you want. Invest in real estate. Buy T Bills for God's sake. All of those are a more stable than the stock market. Nobody said you had to buy stocks. Saying that we shouldn't allow privatization because of the stock market is simply a straw man argument.

It's My Money Damnit: It's my money to lose. If I'm stupid with my money, and end up having to continue to work until I'm 70 at Walmart, that's my own damn fault. But if I'm smart with my money, who says I can't retire at 55 instead of 65? Where did we get it in our head that people either have to work until 65, or become useless after that age? Yes there is risk, but with that risk comes the potential for great reward. It's also my money to give away when I die. The sad fact of the system is that it depends on people dying early to keep the system solvent. Some people live longer, while others do not. What happens to your Social Security when you die? It goes to some other old person. By allowing you to invest your own money, you can choose to give that money to your kids when you die. Imagine what some extra money at a young age could do for a child in a poorer family. Maybe it helps them get out of college debt sooner, or allows them to go to college when they couldn't before. Maybe it helps buy a car to get them to a job where before they had to take the bus. Maybe it becomes a down payment on a house, or helps support an unexpected child. It helps to raise a families level of existence above where it was before. It allows families to improve over time, instead of keeping poor families poor, and middle class families in the middle.

People Become Invested in Their Retirement: It's an interesting phenomenon. Some people can go their entire life and not even think about how they'll support themselves when they grow old. They don't have to care. I'll just work for a while, la de da, and then at 65 I'll retire and the working population the Government will take care of me. If you knew that working harder now could let you retire early or with more money... would you? Would you look more closely at how your money was invested, or how those investments were performing? Why is that a bad thing? Why shouldn't people be given that opportunity?

People Invest in the Economy: Right now, people are investing in the government, and the government is growing. They're being given more money, and they're spending it. On what? What companies are being helped out because they donated to an election campaign? What government agency is being allowed to do a job that a private sector company could do better, simply because the government has the money to spend? When people are allowed to invest into the economy instead, they invest in companies that will perform and give a return on their investment, not because they did you a favor a year ago. The Social Security tax is like hidden secret money that the government doesn't have to be responsible for.

The Transition Cost is Too High: Fact - Social Security will go bankrupt. Paying 70 cents on the dollar is not staying solvent. In fact, that's exactly what people and companies end up doing when they declare bankruptcy! At some point in time, not enough people will be around to buy into the bottom of the pyramid to support the top. Something will have to be done. People don't want to accept this fact. The problem is, the longer we wait, the more it will cost. If you think the transition cost is high now, just wait a few years because it will only continue to grow. So I say that if we have to reform this system, and we do, than lets replace it with something that will not only be able to be sustainable in the long term, but is also fair to those who have to use it, and helps our country grow and become better than it is today.