Social Security

In the article Chairman Greenspan in the lion's den by Tom Curry it tells about how Alan Greenspan supported private investing as part of the social security program. I myself think this is a great idea. I want to be able to invest my money any way that I want for when I retire. We all know that one day we will have to retire and that we should start investing now in our youth so that we can have a good sized retirement fund. I think that Greenspan support of this is great, he is a great economic mind and this will probably put the nation at ease.


Keston said...

I agree with Nick. Something definitely has to be done if we want to have some sort of social security when we retire. Personal investment is a great idea, but what about those who don’t know how to invest, or won’t. For years, citizens have relied on the government to keep social security for them. Do you think everyone will be responsible enough to invest their own money?

heather said...

Alan Greenspan's support will definitely help to bolster support for privatized Social Security, but it seems it will still remain a polarizing issue for a lot of the country. From the news exposure I have had reguarding this, I have been very disappointed by President Bush's inability to explain it well and emphasize the pros. It can be so painful to listen to that man speak sometimes. I agree with the key objectives in revising Social Security, but we need more Alan Greenspans stepping in to elaborate on the reasons why it would be a step in the right direction.

scott said...

I am a big fan of giving control of social security to the taxpayer. Its great that Alan Greenspan is supporting this idea. In answer to Keston's question, I think that giving people the opportunity to invest their own money is better then taking people's money from them, promising a retirement from it, and then giving them nothing back.

Harry said...

I also agree that this is a good idea with what needs to be done with social security. Maybe I am just looking at it from my own point of view and being selfish. I deserve to have money there when I want to retire because I am working for it now. Social Security is a real big issue for the fact that the generation now will probably not get any. Because there will be more people retired than people working. So I think that what Alan Greenspan is saying is a relly good idea.

Marie said...

I do agree that it is a good idea to allow individuals to invest their money for retirement; however, I think that there are a lot of individuals out there who do not have expensible income in the first place to invest into retirement. How will those actions help better the indiviudals who don't have resources? It doesn't come down to being responsible when you don't have anything to be responsible with. Most people I think can state that individuals feed off the government. To a point that is agreeable, but not completely true. I personally would prefer to invest my own money, but there are some aspect to consider.

Ralph said...

I believe I can invest my money better then the government, but not everyone can. This is good for me as well, I plan to go into the investment banking industry this plan could give me future business.

Emily said...

Having a private account to invest in is a great option because of many factors. The money you worked hard for is yours to do with what you want which even means one can give it to whom ever they want if its not all used up when their time is up. People will also get to invest in a variety of ways meaning higher return. There is also more incentive to build up ones retirement when they have more control over it. The Social Security system has its pro and cons which are being debited out right know and that’s good. I am glad that Alan Greenspan is backing the private accounts because his is very influential. When Chile used this type of system it worked pretty well for them. Hopefully the United States will make it work as well.

Dr. Tufte said...

I don't know how to say this delicately: you all have good opinions about this, but they're not "complete". There are big issues here that are just not being mentioned.

First off, I am not a fan of social security. I am a fan of Alan Greenspan, and of private accounts. Having said that though, there are a bunch of moose in the room and no one is mentioning them.

1) Everyone can already save in a private account, but most don't. Why would it be different in the future - because the government is going to make them?

2) Most people who manage their own investments do a substandard job. Is anyone talking about mechanisms to help them do better if they're required to do something they stink at?

3) Do we really want the government (a very risk averse organization) involved in the equity side (the risk taking part) of our markets?

4) Social security is sustainable forever. Period. It can't go "out of business" (although we could shut it down if we wanted to). What will happen is that the checks will get smaller or the taxes will get larger. So far, only the latter has happened.

5) Of course you can do better investing on your own than relying on social security (even if you are a really crappy investor). The reason is that social security doesn't involve any investment. It isn't saying much to claim that you can beat that.

6) Social security is like a family, while retirement investment is like a business. In social security, thw workers support the non-workers, just as in a family. In retirement investment, you defer consumption today so that you can have more consumption in the future - just like a manager reinvesting profits in a firm. You wouldn't run a business like a family, or a family like a business. You probably wouldn't even compare them to each other in the first place. But the level of discussion we have in this country about social security is that it is a bad business (because it isn't run like one). That isn't a constructive argument. The problem with social security is that the fat and happy receivers of benefits have more political power than the workers who are paying in. None of the currently proposed reforms addresses that problem. All that they do is starve the class of receivers - and no one is thinking about how those people will respond through the political system. Let me make a suggestion: perhaps they'll institute laws for preferential treatment for investment of the new pension funds in golf courses, restaurants that serve early bird dinners, and cheap prescription drugs. How will people's retirement accounts fair then?