The Need for Privatization
Every paycheck 7.65 percent is taken out for a retirement program, after the employer kicks in, a total of 12.4 percent of what you earn goes to the government to fund your retirement. The government system offers minuscule returns by anyone's measure and the system is expected to go bankrupt as soon as 2014. If a private company had these problems, no one would invest. But, this is a mandatory program, Americans have to stay in this system and are forced to invest in its fated future. Social Security is one of the biggest disasters of American history. In a country that was founded on the principles of Capitalism and free markets, this socialist program limits people's pursuit of happiness.
Percent Who Believe Social Security Will Not Be There When They Retire
All under 6560%
Social Security is an un-funded pay-as-you-go system. The idea is fundamentally flawed and follows the design of the famous illegal pyramid schemes. Many people claim that the constitution provides a "social safety net", because the preamble of the constitution states that the government should "promote the general welfare" of the people. The constitution then goes on to list the enumerated powers of the state. Nowhere in the list does it say that the government should provide a retirement of healthcare for the people. If the founding fathers wanted these programs, they would have provided a way to pay for them. The rate of savings in the United States is 26 percent of Gross National Product; the country of Chile saves 30 percent of their GNP. With these two countries saving close to the same amount for their future, you would expect both to have similar results for retirees. The United States' Government run pay-as-you-go system provides meager results as compared to even the least progressive private investment. The Country of Chile used to have the same system the US currently uses, but decided to let people invest their own money how they choose in the open market. Chileans pensions are 70 to 100 percent higher than under the old government system since the switch to a private solution.
The Chile system says that a person must contribute at least ten percent of their wages to the retirement program. Many workers contribute more than the ten percent that is required. In a private retirement system, people are free to choose what is best for them. José Piñera, who is Chile's minister of labor, says:
A worker can contribute more than 10 percent if he wants a higher pension or if he wants to retire early. Individuals have different preferences: some want to work until they are 85; others want to go fishing at 55, or 50, or 45, if they can. The uniform pay-as-you-go social security system does not recognize differences in individual preferences. In my country, those differences had led to pressure on the congress to legislate different retirement ages for different groups. As a result, we had a discriminatory...