Posted 10 years ago on Dec. 1, 2011, 6:07 p.m. EST by arealpolitik
This content is user submitted and not an official statement
Posted by: http://thelimingview.blogspot.com/
Anyone who pays any attention at all to the news is probably aware that some Conservatives in the American Government have been on a campaign to have Social Security “Privatized.”
I understand that the reason they want to privatize Social Security is because they believe that it would allow some Americans to enjoy even greater benefits than they do under the present system because they would have the Social Security tied to the Stock and Bond markets so that income for Beneficiaries could fluctuate with the Money Markets.
My contention has always been and remains that if Social Security were made dependent on the fluctuations of the Money Markets it would tend to destabilize individual situations as markets rise and fall.
For example: As I view it, when the Money Markets are doing well and dividends are being paid on investments, the Social Security benefits could rise significantly. My objection to privatizing the system, however, has always been based on an expectation that the Money Markets will never likely sustain continued unabated growth, but that there will be inevitable downturns.
I feel that if a person has a privatized Social Security Account that he or she would suffer potentially dramatic losses in an economic downturn. I have never felt that would be good. I am on Social Security and I know that I prefer to receive a set amount each month in my check. That is how I manage my budget. I would hate to have a situation where I never know from month to month how much cash I am going to have. I would hate to live with the fear of an economic downturn if my Social Security were tied to the Money Markets like some Conservatives wish to have done.
Would privatizing Social Security be good for the economy?
Well, I suspect that it would allow some Brokers and Money Management firms to expand and to profit from it. I am certain in my heart that if Social Security Accounts were privatized, there would be some need for some professionals to “Monitor and Administer it.” In my view, this would result in the Social Security Beneficiary having to pay fees that are not now part of the equation. I think there would be, for example, “Account Maintenance Fees as well as Brokerage Fees and even commissions on investments made on behalf of the account holder. Businesses can be quite artful in inventing new fees for services rendered as anyone with certain types of institutional accounts might attest.
Recently I have been reading of a plunge in the general situation...