Last updated on: 5/10/2017 | Author:

Pro & Con Quotes: Should Social Security Be Privatized?

General Reference (not clearly pro or con)

Investopedia, in a Jan. 2, 2020 article, “What Would Privatized Social Security Mean for Americans?,” available at, stated:

“The current Social Security system in the United States operates in a pay-as-you-go framework, which is administered by the federal government. Social Security taxes paid by today’s workers enter into the general fund and are immediately used to pay current claimants (along with earned income from bonds in the two federal trust funds that support the Social Security program).

Privatization would eliminate the pay-as-you-go process. Instead, each taxpayer’s contributions would be invested in a separate account for their retirement, and its value would fluctuate with the value of their investments in the market.

Proponents of privatization claim that the current system generates insufficient returns and acts in some ways like a Ponzi scheme. They argue that a private system would result in higher standards of living for participants.

Those who oppose privatization counter that it would lead to unwanted investment risk and that it would be too difficult to move from the old system to a new one. Critics of privatization argue that doing so undermines the very principle of the social safety net and the guarantee that it provides older citizens.”

Jan. 2, 2020

Sean Williams, healthcare and investment planning writer at The Motley Fool, in a July 16, 2018 article, “The Pros and Cons of Privatizing Social Security,” available at, stated:

“What does ‘privatization’ mean, exactly? The idea is that instead of the federal government being responsible for your entire retirement payout once you decide to claim your benefit, a portion, or all, of your benefits would be set aside in a separate account that you would control. The thought process being that if you could control your own retirement benefits, you might be able to grow them at a quicker pace over the long-term than the federal government has. It would also, in theory, give retirees more reason to pay attention to their retirement benefits. The idea of partial privatization gained a lot of steam in 2005 when George W. Bush was President. Though Bush’s privatization reforms failed to be implemented, the idea of privatizing Social Security has nonetheless stuck around.”

July 16, 2018

PRO (yes)

Pro 1

[Editors’ Note: The debate to specifically privatize social security has shifted. Those who largely oppose social security altogether as an entitlement and previously argued for privatization are now primarily arguing for other means to change the program.

For example, the Trump Administration put in place payroll tax cuts during the COVID-19 pandemic that in turn lowered the amount of money being fed into the social security program because social security is funded via payroll taxes.]

May 27, 2021

Pro 2

George U. Sauter, MBA, former Managing Director and Chief Investment Officer at the Vanguard Group, in an opinion piece for the Mar. 27, 2017 Wall Street Journal article titled “Should Social Security Be Privatized?,” wrote:

“[Social security] will be unable to fully pay scheduled benefits by 2034 unless dramatic changes are made… So, how to fix it?

The best way to begin is to implement a compulsory system of private retirement-savings accounts for individuals… In a private-account system, there’s no reliance on demographic trends and the government’s ability to tax workers…

One way to implement such a system is to make 401(k) plans mandatory for every worker. Restrictions could be placed on withdrawals, to make sure people accumulate enough for retirement. To prevent workers from taking too much risk, investment choices could be limited to low-cost, diversified options, such as target-date funds…

An account funded as described above is likely to provide a far bigger percentage of a retiree’s pre-retirement income than Social Security does.

The government in the past has ‘fixed’ the Social Security system by increasing taxes and retirement ages – and the system is still in trouble. Private accounts are a better solution for both the government and retirees.”

Mar. 27, 2017

Pro 3

Daniel J. Mitchell, PhD, Senior Fellow at the Cato Institute, in a video posted on his website to accompany the Dec. 22, 2015 articled titled “The Personal and National Case for Genuine Social Security Reform,” stated:

“[Privatization of social security allows] younger workers forgo the miserly benefits promised by government-run retirement schemes in exchange for the chance to invest a portion of their taxes privately. This saves the government money in the long run while allowing workers to amass greater retirement wealth…

The transition costs of personal accounts are actually lower than the transition costs of trying to bail out social security. In other words, we’re in a deep hole right now but it’s easier to get out of the hole if we implement real reform rather than waiting for the system to collapse…

Personal retirement accounts mean individual responsibility; they mean the opportunity to pass wealth from one generation to the next; individual accounts mean more economic vitality; they mean saving our children and grandchildren from a future of debt; and they mean we can be free of depending on the crooks and buffoons in Washington for our retirement.”

Dec. 22, 2015

Pro 4

Michael D. Tanner, Senior Fellow at the Cato Institute, in an Oct. 28, 2003 article titled “The Better Deal: Estimating Rates of Return under a System of Individual Accounts” on

“[I]nvestment in private capital assets provides a higher rate of return than can be earned through the current PAYGO Social Security system… Even those groups that receive the highest returns under Social Security, such as low-income, single-earner couples, would receive higher rates of return through private investment. Higher returns would, in turn, mean higher retirement benefits.

Given the other advantages of individual accounts, such as inheritability, ownership, and equity, Social Security reform based on private capital investment is clearly superior to the current Social Security system.”

Oct. 28, 2003

Pro 5

The Project on Social Security Choice wrote in an article titled “FAQ on Social Security” on its website (accessed Dec. 3, 2009):

“Social Security is already $12.8 trillion in debt. By switching to a personal retirement account system and taking advantage of compound asset growth we will be able to reduce that debt. Social Security’s costs are already there.

By switching to personally invested retirement accounts we can move some of those costs forward and reduce Social Security’s debt and bring the system back into solvency. Tough decisions must be made about where to get the money to move those costs forward and pay them now so that we are not paying more later. While paying those costs now may seem expensive, it is much less expensive than continuing with the current system.”

Dec. 3, 2009

Pro 6

George W. Bush, MBA, 43rd US President, said in his State of the Union address on Feb. 2, 2005:

“As we fix Social Security, we also have the responsibility to make the system a better deal for younger workers. And the best way to reach that goal is through voluntary personal retirement accounts. Here is how the idea works. Right now, a set portion of the money you earn is taken out of your paycheck to pay for the Social Security benefits of today’s retirees. If you are a younger worker, I believe you should be able to set aside part of that money in your own retirement account, so you can build a nest egg for your own future.

Here is why personal accounts are a better deal. Your money will grow, over time, at a greater rate than anything the current system can deliver — and your account will provide money for retirement over and above the check you will receive from Social Security. In addition, you’ll be able to pass along the money that accumulates in your personal account, if you wish, to your children or grandchildren. And best of all, the money in the account is yours, and the government can never take it away.

The goal here is greater security in retirement, so we will set careful guidelines for personal accounts. We will make sure the money can only go into a conservative mix of bonds and stock funds. We will make sure that your earnings are not eaten up by hidden Wall Street fees. We will make sure there are good options to protect your investments from sudden market swings on the eve of your retirement. We will make sure a personal account can’t be emptied out all at once, but rather paid out over time, as an addition to traditional Social Security benefits. And we will make sure this plan is fiscally responsible, by starting personal retirement accounts gradually, and raising the yearly limits on contributions over time, eventually permitting all workers to set aside four percentage points of their payroll taxes in their accounts.”

Feb. 2, 2005

Pro 7

The President’s Commission to Strengthen Social Security (CSSS) wrote in a Dec. 2001 report titled “Strengthening Social Security and Creating Personal Wealth for All Americans” on the US Government Printing Office website:

“Social Security will be strengthened if modernized to include a system of voluntary personal accounts.

Retirement security will be increased through personal accounts because they would facilitate wealth creation for individual participants.

Strengthening Social Security to include personal accounts can add valuable protections for widows, divorced persons, low-income households and other Americans at risk of poverty in old age.

Personal accounts would permit individuals to seek a higher rate of return on their Social Security contributions, offering higher total expected benefits to individuals with accounts than those lacking them.

Partial advance funding of Social Security should be a goal of any effort to strengthen the system. Advance funding within Social Security can best be accomplished through personal accounts rather than direct government investment.

The Commission finds that the establishment of personal accounts is likely to lead to an increase in national saving.

The Commission believes that the establishment of personal accounts will improve incentives for labor force participation.”

Dec. 2001

Pro 8

Charles E. Rounds, Jr., JD, Professor of Law at Suffolk University, in an Apr. 19, 2000 Social Security Privatization article titled “Property Rights: The Hidden Issue of Social Security Reform,” wrote:

“Given the [Social Security] program’s looming financial crisis, benefit cutbacks are increasingly likely. Therefore, the entirely political nature of Social Security places workers’ retirement security at considerable risk. Indeed, Congress has already arbitrarily reduced Social Security benefits of some groups of workers. Moreover, because Social Security benefits are not a worker’s property, they are not inheritable.

In contrast, a privatized Social Security system, based on individual accounts, would provide workers with the benefits and the safeguards of true ownership.”

Apr. 19, 2000

Pro 9

Jagadeesh Gokhale, PhD, former Senior Economic Advisor with the Federal Reserve Bank of Cleveland, wrote in a Dec. 6, 2001 article titled “The Impact of Social Security Reform on Low-Income Workers” in Social Security Privatization:

“Many less-well-off households- particularly minority households and those with low education and earnings – currently save very little and therefore own almost no financial wealth at retirement. As a result, the distribution of bequeathable wealth among retirees in the United States is highly unequal. There is strong evidence that Social Security, which forces the poor to annuitize a large fraction of what would otherwise be their retirement savings, may be contributing to this inequality.

In contrast, a system of individual accounts would allow workers to accumulate real and bequeathable wealth and would lead ultimately to greater equality of wealth.

Social Security privatization therefore becomes the truly progressive option for reform – one that is most likely to benefit the poor.”

Dec. 6, 2001

Pro 10

Holman W. Jenkins, Jr., MS, journalist for the Wall Street Journal, wrote in a Jan. 21, 2009 article titled “Can Obama Make Government Solvent?” on

“[T]hose who think the recent halving of America’s 401(k)s proves the unwisdom of such [private savings] reforms should think again. Today’s workers should be so lucky to get a realistic picture of what Social Security and Medicare might pay when they retire. In contrast, their mutual-fund statements are a model of transparent honesty about current expectations of future earnings of American business.”

Jan. 21, 2009

Pro 11

Mike Huckabee, former Governor of Arkansas, stated at the Oct. 21, 2007 Republican Presidential Debate in Orlando, FL:

“The president [George W. Bush] had the right idea, but he used the wrong word. When he used the word privatization, it scared the daylights out of a lot of people…

The right word is personalization. Empower individuals to have a greater say over their money. And that’s what it is. Keep the government from robbing the trust funds, which is something that, if it was done in the private sector, would get a guy in jail.”

Oct. 21, 2007

CON (no)

Con 1

Max Richtman, President and CEO of the National Committee to Preserve Social Security and Medicare, Mar. 20, 2020 article, “Opinion: Do workers really want to gamble their Social Security benefits on Wall Street?,” available at, stated:

“This month’s [Mar. 2020] dramatic losses on Wall Street in the midst of the coronavirus crisis are a reminder of why Social Security is so important — and why privatization of Americans’ earned benefits remains such a bad idea.

In a few short weeks, workers nearing retirement have seen their 401(k) accounts crater. They may not have time to recover those losses before retiring. Too many nest eggs will be hollowed-out if not destroyed altogether.

Amid this market volatility, retirees can still count on Social Security for basic retirement income. Those benefits — about $1,500 a month for the average worker — are far from lavish. But they are reliable. A recent survey by the National Institute on Retirement Security (NIRS) indicated that more than 40% of retirees depend on Social Security for most or all of their income. That’s one reason why Social Security is the bedrock of America’s working and middle classes.

Unfortunately, entitlement reformers have long sought to privatize the program by allowing workers’ payroll contributions to be invested in private accounts. These “reformers” would encourage Americans to gamble their hard-earned Social Security funds on Wall Street. If markets tumble, retirees’ Social Security checks would be reduced. The distinction between 401(k) plans and guaranteed Social Security benefits would begin to blur — and likely disappear altogether if the program were completely privatized.”

Mar. 20, 2020

Con 2

Silvia Borzutzky, PhD, Teaching Professor of Political Science and International Relations at Carnegie Mellon University, in the Dec. 26, 2018 abstract for a Poverty and Public Policy paper, “Privatizing or Annihilating Social Security: What the United States Can Learn From Chile’s Privatization,” available at, stated:

“[B]ased on Chile’s 38-year experience with a privately administered, fully funded, defined contribution system, the adoption of this kind of approach in the United States will be very damaging. We argue that this policy will be especially harmful to low-income groups, to women, to both racial and gender minorities, and to those who have part-time employment or find themselves in and out of the labor market. Additionally, this kind of policy does not solve the financial problems of the Social Security system. In fact, transferring either the entire, or a part of the payroll tax to private accounts will add a new burden to the fiscal coffers via transition costs, as fiscal receipts will diminish and the obligation to pay pensions to old and new retirees will continue. From the standpoint of the insured and potential retiree, the cost of administering the retirement accounts will increase, but there is no certainty that the benefits will increase due to the unpredictable nature of the market and the increase in administrative costs. Most importantly, for lower-income groups, the redistributive effect that Social Security has today will be eliminated.”

Dec. 26, 2018

Con 3

The National Committee to Preserve Social Security and Medicare (NCPSSM), in “The Truth About Social Security and Privatization” section of their website, (accessed May 9, 2017), wrote:

“Social Security is a successful intergenerational program that has served this country well…

Privatization is not a plan to save Social Security; it is a plan to dismantle Social Security. Privatization means increased retirement risks, severe cuts in Social Security benefits, and a multi-trillion dollar increase in the federal debt…

Right now, Social Security provides a guaranteed income, paying benefits every month for life, with increases for inflation. After adjusting for risk, Social Security has a rate of return equal to that of any mix of financial assets in private accounts.

And risk must be taken into account, because stock market returns are never guaranteed! As we’ve seen in recent years, returns can fluctuate wildly… With privatization, some might do well, many might lose – but our society would lose the benefit of the sound, basic income security provided by Social Security retirement, disability and survivor benefits…

Privatization is NOT the Answer!”

May 9, 2017

Con 4

Nancy J. Altman, President of Social Security Works, in an opinion piece for the Mar. 27, 2017 Wall Street Journal article titled “Should Social Security Be Privatized?,” wrote:

“Social Security has much lower administrative costs than private insurance or retirement-savings plans. Even relatively low-cost options like target-date funds can have high fees… At base, individual accounts are expensive to maintain. They would be even more expensive if maintained for low-wage workers.

In contrast, Social Security covers virtually all workers and their families, and spends more than 99 cents of every dollar on benefits, not administration.

Social Security has other advantages. It pays benefits to spouses, including divorced spouses, and dependent children, not only at retirement, but also in the event of disability or death. Even highly paid workers who die or become disabled at age 30 would not have had time to save much. Many of those families would be destitute without Social Security. Its benefits are increased annually to offset inflation, so they don’t erode over time.

Social Security has stood the test of time. It is more universal, secure, fair and efficient than any privatized system that could be devised. To increase Americans’ economic security, we should build on its success. Social Security should be expanded, not cut and certainly not privatized.”

Mar. 27, 2017

Con 5

The AARP (American Association of Retired Persons) wrote in an Apr. 28, 2010 email from John Rother, AARP Executive Vice President of Policy and Strategy, to

“AARP strongly opposes these proposals [to divert Social Security payroll taxes to private accounts]. Private accounts in place of Social Security are risky, expensive to administer, and require huge increases in the federal debt. AARP believes there are better and more responsible ways to strengthen the system.

To compensate for the loss of Social Security revenue sent into private accounts, the federal government would have to borrow significant sums for the next several decades in order to continue to pay promised benefits to currently retiring beneficiaries. One prominent proposal would require $1 billion in the first 10 years the private accounts were in place. Then, $3.5 trillion would be needed in the following decade. Younger workers would have to bear much of the burden for paying this debt. That’s not right, and it’s not fair to them.

Social Security is an insurance program, not an investment program. The essence of Social Security is that it has always been risk-free for all of us. It’s also inflation-proof – something neither investments, nor even many pensions, can guarantee. Private accounts within Social Security would add a large measure of personal risk. AARP has publicly stated many times that there are places in retirement planning that are appropriate for taking risks, such as 401(k) plans, Individual Retirement Accounts, and mutual funds, but they should be in addition to the guarantee of Social Security.”

Apr. 28, 2010

Con 6

Barack Obama, JD, 44th US President, stated on Aug. 18, 2010 in “Remarks by the President at a Discussion with Ohio Families on the Economy” on the White House website:

“I have been adamant in saying that Social Security should not be privatized and it will not be privatized as long as I’m President. And here’s the reason. I was opposed to it before the financial crisis. And what I said was the purpose of Social Security is to have that floor, that solid — rock-solid security, so that no matter what else happens you’ve always got some income to support you in your retirement. And I’ve got no problem with people investing in their 401(k)s, and we want to encourage people to invest in private savings accounts. But Social Security has to be separate from that…

So here’s the thing. Social Security is not in crisis. What is happening is, is that the population is getting older, which means we’ve got more retirees per worker than we used to. We’re going to have to make some modest adjustments in order to strengthen it. There are some fairly modest changes that could be made without resorting to any newfangled schemes that would continue Social Security for another 75 years, where everybody would get the benefits that they deserve.”

Aug. 18, 2010

Con 7

Libby Perl, Analyst in Housing at the Congressional Research Service, stated in a Mar. 9, 2005 article titled “False Promise: How Social Security Privatization Would Sting Young Adults” on

“Advocates of Social Security privatization are selling the idea of private accounts to young people as the best way to secure their future retirement. Yet under the Social Security plan outlined in President Bush’s 2005 State of the Union address, sustaining promised benefits for those age fifty-five and over would require the government to borrow nearly $5 trillion over twenty years…

If privatization proposals were adopted, young people would lose in three significant ways:

Reduction of Benefits. The Commission’s privatization proposal would, over the next 47 years, reduce benefit levels by as much as 44 percent below current Social Security benefits, and 28 percent lower than the benefits that would be provided even after the trust funds become depleted.

A Change in How Benefits Are Calculated… This plan would end the policy of linking Social Security benefits to wage growth, a practice that has been in effect since the 1970s…

Performance and Administrative Costs of Private Accounts. Returns on private accounts are not likely to be as high as some privatization advocates predict. Some will do better than the averages quoted and some worse. No matter how the stocks perform, workers who elect to create investment accounts would receive even deeper cuts in their guaranteed benefits in order to pay back the money borrowed to finance the account.”

Mar. 9, 2005

Con 8

Greg Anrig, Vice President of Programs, and Bernard Wasow, PhD, Senior Fellow of Programs, both at the Century Foundation, wrote in a Dec. 14, 2004 article titled “Twelve Reasons Why Privatizing Social Security Is a Bad Idea” on

“Addressing Social Security’s potential long-term financing challenges by taking the dramatic step of diverting its payroll taxes to create new personal accounts would represent a radical departure; it also would be a bad idea…

Current Social Security insurance protections have served the country well for decades. Diluting those protections in exchange for new accounts poses all kinds of new risks while making the relatively manageable long-term challenges confronting Social Security far more immediate and severe.”

Dec. 14, 2004

Con 9

Peter A. Diamond, PhD, Institute Professor at the Massachusetts Institute of Technology (MIT), and Peter R. Orszag, PhD, Joseph A. Pechman Senior Fellow in Tax and Fiscal Policy at the Brookings Institution, in a June 2002 report titled “Reducing Benefits and Subsidizing Individual Accounts: An Analysis of the Plans Proposed by the President’s Commission to Strengthen Social Security” on the Center on Budget and Policy Priorities website, wrote:

“[T]he individual accounts themselves would worsen Social Security’s balance over the next 75 years. Moreover, the individual accounts would have an adverse effect on Social Security’s financial condition on a permanent basis, rather than just during a ‘transition period’.”

June 2002

Con 10

The American Federation of State, County and Municipal Employees (AFSCME) wrote in an article titled “What Is Meant by Social Security ‘Privatization’?” on (accessed Dec. 3, 2009):

“AFSCME strongly favors personal savings for retirement and has fought for savings plans in the workplace. Savings / investments are an important leg in the ‘three-legged stool’ of retirement income, the others being Social Security and pensions. But Social Security privatization would make the stool wobbly by combining the Social Security and savings legs. Somehow, a two-legged stool doesn’t seem as sturdy.

The stool looks even more wobbly when you consider that the majority of workers retire without pensions and fewer employers now offer them. In fact, two-thirds of Social Security recipients count on Social Security for at least half their income.”

Dec. 3, 2009

Con 11

Ralph Nader, LLB, attorney, author, and political activist, stated in a Jan. 21, 1999 speech at the “Saving Social Security from the Privatization Threat” Conference held in the Rayburn House Office Building of the US House of Representatives:

“The various Social Security privatization schemes, full and partial, would cost both the ‘social’ – that is the public, cooperative, societal – element of the program and ‘security’ – the rock-solid income guarantee afforded by the system. It should be rejected.”

Jan. 21, 1999