Privatize Social Security
- Strongly Support means you believe: Our retirement funds should not be entrusted to the government. The entire Social Security system should be run instead as we currently run IRAs, Keogh plans, 401(k)'s, and other private pension plans.
- Support means you believe: The Trust Fund might be invested in the stock market or via some other private investment vehicle. Individuals should be given at least some control over how their retirement funds are invested.
- Oppose means you believe: Social Security should remain under federal control, but you want reforms on how the Trust Fund is handled. In particular, the `Lockbox Bill' is a good first reform, since it keeps the system secure while avoiding privatization.
- Strongly Oppose means you believe: Social Security should remain forever under federal control to ensure that all Americans have a secure retirement. The Trust Fund should not be invested in anything like the stock market, since that would introduce undue risk.
This question is looking for your views on how large a role the federal government should play in individual retirement. However you answer the above question would be similar to your response to these statements:
- Self-management of one's Social Security account
- Unlimited contributions to IRAs
- Allow people to contribute to EITHER Social Security taxes OR their own personal retirement accounts
Social Security Trust FundThe Trust Fund is the government's means of saving up for the expected increase in retirement in coming decades.
The primary policy question is where to invest the fund, and whether to increase the total fund by adding money from the budget surplus.
- The Clinton plan is to have the federal government continue to control the investment (which implies investing in Treasury Bills, which means lending to the National Debt).
- The Congressional plan is to have individually controlled retirement investment accounts (which implies investment in the Stock Market, Bond Market, and Money market)
- Alternative plans are to have government-controlled investments in the stock market or other private markets.
Social Security Investment
Due to the enormous amount of money involved, where and how the Trust Fund is invested will dramatically impact the economy.
$0.6 trillion Total amount currently in the Trust Fund (1999)
$3.0 trillion Estimated amount needed by peak year (2015)
$2.9 trillion Expected total budget surplus for years 2000-2009
$1.8 trillion Total amount of most recent federal budget (2000)
$5.6 trillion Total amount of the federal National Debt (1998)
$11.6 trillion Total market capitalization of the NYSE (1999)
- The Lockbox Bill aims to protect the future Social Security surplus by removing it from the control of federal budget makers.
- The vote in Congress was 416-12 in favor of the bill.
- It would require a super-majority vote on any bill that would add to the budget deficit, which implies borrowing from the Social Security Trust Fund.
IRAs and other Retirement Accounts
- Individual Retirement Accounts (IRAs) allow saving $2,000 per year tax-free, to be withdrawn beginning between ages 59 and 71.
- Keough Plans for self-employed people allow saving $30,000 per year tax-free, to be withdrawn beginning at age 59.
- Salary Reduction Simplified Employee Pension Plans (SAR SEPs), allow investing $6,000 per year tax-free in stocks, bonds, mutual funds, or precious metals.
- 401(k) company-sponsored retirement plans allow investing $30,000 per year tax-free in any investment vehicle, including real estate and insurance.