The Question is pretty simply what would have happened to social Security in the fall of 2008. When the economy went sour had it been in wall streets hands?
1. Would that type of shock been enough to end social security?
2. Would the government have added that to there bailouts?
I think it would have killed social security, I don't think the government would have bailed it out. We would have just been handed a speech on risk and investments. Not that the end of SS would be that bad, A lot of bureaucrats would have lost there jobs.
What do you think the outcome would have been?
Er, Bush didn't want to privatize Social Security, so much as "give the choice" of investing a part of the money they pay out from Social Security into other investments.
Privatizing Social Security would have any meaning if the US government had started a separate pension fund from which proceeds are entered and taken out. Since it's just a form of taxation and giving those taxes back from other people's taxes, how can you privatize it, unless you could privatize the Treasury?
But I hear Chile managed to privatize its state pension scheme very well, although it may have been totally different from the American system from start.
Bush has come out and said not privatizing Social security was his greatest failure.
If that had passed back in 2005, and people had the choice to invest, how would the government handled that combined with the economic collapse in 2008, would they have bailed out those the took the choice, or told them sorry. you should understand the risk of investment. I think social security is a bad idea in any form.
It might have postponed the collapse by infusing more capital into the market. It might have created more jobs and held the system together a little longer. The crash might have occurred a few months later.
There would have been no need for a bailout of these investments because only young workers would have been able to invest (afaik). They would not yet be using the money and in need of it.
Prateek Sanjay:But I hear Chile managed to privatize its state pension scheme very well, although it may have been totally different from the American system from start.
I think it's possible to privatize social security systems that are fiscally sound. For example, Sweden's social security system takes in something like five times as much in taxes as it (currently) gives out in benefits. While I'm no expert on privitization schemes, it seems to me rather easy (technically speaking) to sell off the Swedish social security system to a private company.
The keyboard is mightier than the gun.
Non parit potestas ipsius auctoritatem.
Maybe I don't really understand the plan, but how could this be a good idea? Wouldn't the government just end up channelling the money into politically-favored enterprises? What incentive would government have to invest the money safely long-term, since the politicians who make those decisions know they'll be long gone when "long-term" finally arrives, and since wage-earners would have no option to withhold payment if they disagreed with the way it was being invested?
I believe workers would choose where a portion of their own money would be invested.
The collapse was ineveitable.
Social security should not be privatized. It should be abolished!
We should not be satisfied with "privatization" shams that amount to nothing but fascist solutions disguised as free market solutions.