Second question re: debt. Again, you ignore the unfunded liability of Social Security that exists this minute. It does not cost more to transition to Personal Retirement Accounts- PRA's just make the unfunded liability visible sooner. Unless we are willing to knowingly cheat our grandchildren- and I am NOT- the sooner we change the structure of Social Security, the less the cost. The reason the private sector growth must be in individual accounts is because that is the only way the individual worker can have control over her/his retirement decisions.
The object is not, as you derisively imply, to create "fat savings accounts and secure retirements". The object is to permit young workers to get market rate return on some of their FICA taxes so they won't resent continuing to honor benefits to current retirees. The only way benefits to current retirees can be secure during the transition, is for younger workers to get a fair deal. Currently a 21-year-old entering the workforce will get a negative the FICA taxes he and his employer pay. A middle aged worker gets around 1% - 2%. As the number of workers supporting each retiree decreases, those returns will get worse under pay-as-you-go. Personal Retirement Accounts permit workers to benefit to some extent from private sector growth so they won't resent retirees.
Does private sector investment work? Just ask anyone on TIAA/CREF if she/he would trade that program for Social Security retirement benefits.
