>>>>When discussing the pro's and con's of private accounts one must not forget the macroeconomic benefits private accounts have over other solutions. When a dollar of one's payroll taxes goes into a private account that is invested in the equity markets it adds another dollar to the investment pool. A larger investment pool makes it cheaper for companies to expand and therefore create new jobs by reducing their cost of capital. This not only lowers unemployment, but adds to the tax base fractioanly thereby helping Social Security and reducing our deficit and/or incresing our surplus.
Unfortunately, just redirecting a dollar from the SS Trust Fund (or payroll taxes) to the equity markets does not do this. To the extent that that dollar would have reduced gov't public debt by a dollar, the gov't will pull an equivalent dollar from the capital markets (i.e. investment pool).
To increase the investment pool, the dollar must come on top of the current payroll taxes and on top of an individual's current savings. It must come from current consumption.
