Steve Johnson said:
Isn't it fair to say, therefore, that the private account
strategy continues to suffer from two basic flaws? There's
still a fair amount of retiree-borne risk that hasn't been
squeezed out of the personal account strategy. And there's no
real way for a private account strategy to deliver full benefits
to all retirees, short of a permanent federal subsidy, in an add-on
scenario, or a permanent increase in the payroll tax, in a carve-outscenario.
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1) Risk is part of life. There is considerably more risk of reduced benefits and increased taxes with the current system. No citizen has ownership of any social security taxes he has paid.
Private Retirement Accounts permit all workers to accumulate wealth that they own throughout the accumulation period.
2) The current system in another generation will require extaordinarily high payroll taxes or significant decrease in benefits--probably both. A private personal retirement account will conservatively pay back much more than today's benefits. Every single worker will be accumulating wealth and putting it to work in the economy. That is such a refreshing change from the current tax and spend policies that turn the elderly into wards of the state.
