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There are two crises facing Social Security. First the program has a gigantic unfunded liability, largely thanks to demographics. Second, the program is a very bad deal for younger workers, making them pay record amounts of tax in exchange for comparatively meager benefits. This video explains how personal accounts can solve both problems, and also notes that nations as varied as Australia, Chile, Sweden, and Hong Kong have implemented this pro-growth reform.

Social Security Series Part 6

Personal accounts would cause the economy to grow.

Dan Mitchell of the Cato Institute has asserted that three things would happen if Social Security was privatized.

1. Lower tax rate on work, encouraging job creation.

2. Less government spending, leaving more resources in productive sector.

3. More private savings, fueling investment.

Dan Mitchell goes on to say that this “is exactly what you would expect if you replace a tax and transfer entitlement scheme with private savings and wealth accumulation.”

José Piñera discusses privatizing social security on FBN