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Privatization Heretics

January 12, 2005

Nick Gillespie at Reason is "not a raving fan of Social Security 'privatization' for a number of reasons. Among them: I don't like the idea of forced savings, period; to the extent that SS taxes go into the general fund and subsidize guaranteed state pensions/minimum incomes, they should be named as such; the amount of money under any plan that will be given back to the payer is minimal (likely 1 or 2 percent in my estimation) and possibly not worth the hassles); there's the possibility of socializing equities markets; etc."

Irwin Stelzer at The Weekly Standard: "[T]he proposal now on the table would have the government limit investment options to stock-index mutual funds, bond funds, and cash—the resulting pool to be converted into annuities upon retirement. The theory of forced conversion into annuities, rather than allowing lump-sum withdrawals, seems to be that retirees and their money might otherwise soon be parted, a folly the government is honor-bound to prevent. So much for freeing citizens from the heavy hand of the state.... [N]o one can be sure of the effect of hitting the markets for a few odd trillion more in borrowing. We can, however, be sure that there is a risk in doing so, making it reasonable to ask whether that risk is worth taking to achieve what seem like the minimal gains in freedom and earnings that might flow from individual retirement accounts."

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