While Steve Johnson makes some valid conclusions based on average dividends from the stock market, most of the growth and subsequent returns from the market come from capital growth and not from dividends. In addition, the surplus is not expected to supply 100% of sSocial Security payments. The purpose of surplus investment is designed to simply assist in securing that surplus to make up for short falls in the future, starting in the year 2013. So I agree with Steve that "complete privatization" is out of the question, but privatization of the surplus is not economically feasible but the only way to insure availability of funds for future short falls.
The market investment of surplus funds left to the judgement of individuals would, by the nature of varying levels of personal risk choices, leave some with unnecessary fluctuations in returns. The more conservative approach would be to stick with government controled investments of the surplus in Index Funds with historcally proven average returns.
We must not necessarily regard privatization as an all or nothing approach. In order to insure continuation of benefits to those who are retired and those who are close to that age group, we must continue to maintain Social Security in it's present form but attempt to insure the sound investment of it's surplus. The present method of government bonds only provide SS with IOU's that must be later redeemed at the expense of the same folks who have paid into this surplus. This is a double whammy that makes absolutely no sense! Let's keep the good parts of SS and get rid of the bad, but let us not throw out the baby with the bath water.
Mac
