Okay. This guy’s voice is incredibly annoying. This video is interesting but he doesn’t go into any detail. Where are the details? Give us specifics.
Their six reasons for private accounts:
1. Social Security is broke
2. Payroll taxes already are too high
3. Social Security is a bad deal for workers
4. Personal accounts are safer than Social Security
5. Personal accounts boost economic growth
• Lower tax rate on work, encouraging job creation
• Less government spending, leaving more resources in productive sector
• More private savings, fueling investment
6. Personal accounts are working in other nations
At the end of the video he mentions the catch regarding private accounts:
“Social Security is a pay-as-you-go system, which means that taxes from today’s workers are used to pay benefits to today’s retirees. So if we allow younger workers to ship their payroll taxes to personal accounts, what do we use to pay benefits? since nobody wants to pull the rug out from under older workers or current retirees, we will need to come up with moneya lot of moneyto fulfill those promises. We’re talking about trillions of dollars. But, this isn’t an argument against personal accounts. The transition cost of personal accounts are actually lower than the transition cost of to bailout Social Security.”
I would like to see those numbers.
I love the idea of private accounts. This is how it should have been set up all along. It should have NEVER been a pay-as-you-go system. I almost think it was designed that way in the first place in order to make it virtually embedded into our system, making it harder to change or do away with.
Related: Is Social Security a Ponzi scheme? Edward Harrison doesn’t think so.