"Saving" Social Security Is Not Enough
by Michael Tanner
Michael Tanner is director of the Cato Institute Project on Social Security Privatization and coauthor of A New Deal for Social Security (1998).
Executive Summary
It seems that no politician discusses Social Security these days without a
call to "save" the program. Certainly, it is possible to see why the program
needs saving. It is facing financial insolvency: it is more than $20 trillion
in debt and will be running a deficit in just 15 years.
But to focus on "saving" Social Security is to miss the larger point. Merely
finding sufficient funding to preserve Social Security fails to address the
serious shortcomings of the current system. The question should be, not whether
we can save Social Security, but whether we can provide the best possible retirement
system for American workers. Social Security fails both as an anti-poverty program
and as a retirement program. It contains numerous inequities and leaves future
retirement benefits to the whims of politicians. Why should the goal of public
policy be to save such a program?
Instead of saving Social Security, we should begin the transition to a new
and better retirement system based on individually owned, privately invested
accounts. The new system would allow workers to accumulate real wealth that
would prevent their retiring to poverty. Because a privatized system would provide
a far higher rate of return, it would yield much higher retirement benefits.
Because workers would own their accounts, money in them could be passed on to
future generations as an inheritance. That would particularly benefit the poor
and minorities. Finally, workers would no longer be dependent on politicians
for their retirement incomes.
Index of Social Security Choice Papers
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