Couple of things:
1. CBO has done several studies on the current and future solvency of
SS, and the impact of privatization-- here's part of their analysis:
CSSS Plan 2 would introduce IAs by:
* Allowing workers to divert 4 percentage points of their payroll
taxes, up to $1,000, to a personal account, which would belong to
covered workers;
* Disbursing the principal and interest in those accounts--in the
form of annuities that would supplement Social Security
benefits--to workers at retirement or to their heirs if they died
before retirement; and
* Reducing the traditional benefit by the annuitized value of a
notional (or theoretical) account, equivalent to the diverted
payroll taxes accrued at the Treasury interest rate minus 1
percentage point.
Participation in IAs would be voluntary, but there is an unambiguous
incentive for individuals to participate. In this analysis, CBO assumes
100 percent participation.
CSSS Plan 2 would lower benefits relative to current law by changing the
computation of benefits from wage indexing to price indexing starting in
2011. CSSS Plan 2 would partially offset the benefit reduction resulting
from price indexing by:
* Establishing a "low-earner enhanced benefit" for low-earner OAI
worker beneficiaries with at least 20 years of work and for DI
beneficiaries with quarters of covered work at least equal to two
times the number of years since age 22 until claim.
* Raising the survivor benefit to 75 percent of the couple benefit
for widows and widowers, if the resulting survivor benefit is
higher than the current-law benefit. The benefit under this
provision would be limited to the amount that the survivor would
have received if his or her PIA was the mean PIA of all retired
workers from the previous year.
CSSS Plan 2 would transfer general funds to the Social Security trust
funds whenever the balance of the trust funds fell below zero.
CBO projects that under current law, the government will be unable to
pay scheduled benefits starting in 2053 and Social Security outlays will
exceed revenues from payroll taxes and taxation of benefits beginning in
2019. CSSS Plan 2 would enable the government to pay the benefits
scheduled under that law without transferring additional money from the
general fund until 2036. From 2036 through 2050, transfers from the
general fund would be required. After 2050, scheduled benefits would
fall sufficiently that dedicated revenues would be large enough to pay
them in full.
___________
Note: current plan is solvent until 2053, unlike rest of govt
programs. Privatization reduces benefits and shortens the period of
solvency.
So-- follow the cash. Ask the only important question when dealing with
money and the bourgeoisie: Who's zooming whom?
--
Michael Perelman
Economics Department
California State University
michael at ecst.csuchico.edu
Chico, CA 95929
530-898-5321
fax 530-898-5901
