social security shouldn't be privatized

Author: n8nrgim

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#1
n8nrgim
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if the private sector did social security, it would probably use annuities. i just read though that social security provides a larger benefit than annuities, with a cost of living increase included every year. 

the stock market isn't a good place to park the money either. if annuity companies invested for beneficiiaries, they'd use the stock market, or if individuals did their own investments theyd use the stock market. the problem, is that most people lose money in stocks. as warren buffett said, he only knows less than ten people that can beat a stock market index fund. so most people who lose their shirts. if we limited it to index funds, that'd not work too well either. stock prices are determiend based on profitability, and only so much money can go into them while still being profitable based on the earnings. it would get overvalued and returns in the future would suck. plus there's no guarantees with stocks, whereas with social security it's guaranteed.

plus social security provides a way better living standard for low income beneficiaries. annuities i think are worse for everyone, but it's way worse for low income or lower middle income people. we'd have to subsidize their annunities to make it work, and annuities are already less profitable. 

maybe a hybrid system where a cap on social security tax is made, and the rest privatiaved that can be taxed for general welfare. social security is already is already being squeezed though, and the extra revenue will be needed to keep the system afloat. there's a lot of money in real estate though, if it was designed right, maybe future benefits could theoretically be used in real estate funds. 

plus a big problem with privatizing is that we have to fund both current beneficiaries plus future privatized beneficiaries as well.that would be super expensive to fund both. 

in short, there's too many risks privatizing and too much guarantees and benefits to keepting it the way it is. 
#2
WyIted
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The stock market averages 8% a year. Warren buffet wasn't saying people can't beat the stock market as discouragement from investing. He was saying to park your money in an index fund like the S&P 500 and just let the stock market do the work for you. 

Gaining 8% a year doesn't mean you lost. 8% beats inflation.
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#3
n8nrgim
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You’ve laid out a strong case for keeping Social Security as a public system rather than privatizing it. The guarantees it provides—steady benefits, cost-of-living adjustments, and a progressive structure that benefits lower-income retirees—are hard to match with private alternatives like annuities or stock-based investments.

A few key points from what you said:

1. **Annuities vs. Social Security:** Social Security provides a better return than annuities because of the way it is structured—it's not aiming for profit, and it spreads risk across the whole population.
 
2. **Stock Market Risks:** While index funds are solid long-term investments, the market has limitations. Not everyone has the skills to manage their investments effectively, and large-scale privatization could overinflate stock prices and lead to disappointing returns.

3. **Funding Transition Costs:** If we privatized, we’d have to fund both current beneficiaries and new private accounts at the same time, which would be massively expensive.

4. **Inequality Concerns:** Low-income retirees benefit significantly from Social Security’s progressive structure. Private accounts or annuities wouldn’t provide the same safety net, and subsidies would be needed to prevent extreme disparities.

Your idea of a **hybrid system**, with some privatization beyond a capped Social Security tax, is interesting. Using real estate as part of a retirement funding strategy also has potential, given the wealth stored in property assets. However, any privatization would have to navigate the challenge of ensuring stability and avoiding excessive risks.

At the end of the day, Social Security works well because it provides guarantees that private markets can't easily replicate. Do you think there are any realistic ways to improve the current system without major risks?
the above is what artificial intelligence thinks of my argument, it seems to like it. 
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#4
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@WyIted
i already addressed that, and you didn't respond to it. only so much money can go into the market while still being profitable based on earnings. if too much goes it, it would be overinflated and lead to poor future returns. it'd be volatile too much. 
#5
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@n8nrgim
I am only responding to the following point

warren buffett said, he only knows less than ten people that can beat a stock market index fund. so most people who lose their shirts.
Making 8% returns is not losing your shirt, and I have no opinion on your broader argument just correcting something I see as wrong.
#6
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Well my opinion is it should be privatized but that's only because I know I can make bigger returns with my money than the feds do
#7
WyIted
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Deep seek opinion below


The question of whether investing in the stock market (with an 8% return) is better than paying into Social Security involves trade-offs between **risk, guarantees, and ancillary benefits**. Here's a structured analysis:

### **1. Key Differences Between Social Security and Stock Market Investing**
- **Social Security**:
  - A government-managed program providing **lifetime inflation-adjusted income**, disability/survivor benefits, and longevity insurance.
  - Benefits are calculated based on lifetime earnings, not market returns.
  - Funded by a **12.4% payroll tax** (split between employer/employee; 6.2% each).
  - Progressively structured: Lower-income earners receive proportionally higher benefits relative to contributions.

- **Stock Market**:
  - Historically averages **~7–10% nominal returns** (or ~5–7% after inflation).
  - Requires self-management, exposes investors to **volatility and sequence-of-returns risk**.
  - No insurance protections (e.g., disability, survivor benefits).

---

### **2. Hypothetical Scenario: Comparing Returns**
Assume a worker earning **$50,000/year** invests their 6.2% payroll tax ($3,100/year) in the stock market at **8% nominal returns** over 30 years:
- **Future Value**:  
  Using the annuity formula:  
  `FV = $3,100 × [(1.08^30 – 1)/0.08] ≈ $351,175` (pre-tax).  
  At a 4% withdrawal rate, this provides **~$14,000/year** (pre-tax).

- **Social Security Benefits**:  
  For a $50,000 earner, benefits replace **~40% of pre-retirement income** ($20,000/year), adjusted for inflation and guaranteed for life.

**Comparison**:
- Social Security provides **higher annual income** ($20k vs. $14k) and adjusts for inflation. However:
  - Stock investments could grow further if not fully spent, allowing for wealth transfer to heirs.
  - Social Security’s value increases with longevity (e.g., living past 85).

---

### **3. Critical Considerations**
- **Risk**:  
  - Social Security is **risk-free**; stock returns are volatile. A market downturn near retirement could devastate savings.
  - Social Security includes **disability/survivor protections** (valued at ~$500k for a median earner).

- **Progressivity**:  
  - Low-income earners often receive **better "returns"** from Social Security than the stock market. High earners may fare worse.

- **Taxes and Employer Contributions**:  
  - Ignoring the employer’s 6.2% understates Social Security’s funding. If both portions are invested (12.4%), the stock portfolio would double.

- **Inflation**:  
  - An 8% **nominal** return (~5–6% real) reduces purchasing power over time, whereas Social Security is inflation-indexed.

---

### **4. When Might Stocks Be Better?**
- **High earners** with longer investment horizons and risk tolerance.
- **Shorter lifespans** (allows heirs to inherit remaining funds).
- If **additional insurance** (e.g., private disability insurance) is purchased separately.

---

### **5. When Is Social Security Better?**
- **Low/middle-income earners** (due to progressive benefits).
- **Risk-averse individuals** seeking guaranteed income.
- **Long-lived retirees** (outliving savings is mitigated).
- Those valuing **built-in insurance** (disability, spousal, survivor benefits).

---

### **Conclusion**
While the stock market *could* provide higher returns for some, Social Security’s **guaranteed, inflation-adjusted lifetime income** and **insurance protections** make it irreplaceable for most. The two systems are complementary: Social Security provides a safety net, while personal investments enhance flexibility. Forced participation in Social Security ensures societal risk-sharing, which individual investing cannot replicate.
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#8
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@WyIted
you are missing the point. if everyone invests in the s and p 500 it would get overinflated and the market would get dysfunctional. i'm sure there are individuals who would do better with their own money if they had more control over their funds, but most would suck, and it wouldn't work on a mass scale. if your bottom line is that it's every man for himself, we just have a fundamental difference in opinion. 
#9
ADreamOfLiberty
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@n8nrgim
if the private sector did social security
... there are a million ways to do things private an public.

Before I read any further, let's remember what actually happened with the so called public trust of government was relied upon: They stole it all.

They stole all the money, all social security payments have been incorporated into the federal budget. There is no giant investment fund. There is no pile of gold. There is no portfolio of assets.

They just took it, because they're thieves. The whole theory of socialism is about giving them the moral excuse to steal it and most of Keynesian macroeconomics is giving them an excuse to steal it, so that's what they did.

That's how low the bar is: open and total theft.


it would probably use annuities. i just read though that social security provides a larger benefit than annuities, with a cost of living increase included every year. 
The government is causing the inflation, they have the power to devalue the buying power of investment returns (of all kinds) and that's what they're doing.

This is like saying: you should pay the hotel fees because the hotel manager burned down your house so where else are you going to stay?


the stock market isn't a good place to park the money either.
The only safe place to store value in runaway inflation is land and prepper bunkers. The kind of thinking which created social security is causing runaway inflation.

Any plan that doesn't start with the cessation of cutting ourselves will fail to control the blood loss. Trying to compare investment returns between the baseless claims of legislative action and the rapidly devaluing returns of private investment is like discussing a diets while bleeding out (due to self-cutting).


the problem, is that most people lose money in stocks.
People sometimes lose money in stocks. People always lose money to the government. Like with social security, where they stole it all.


he only knows less than ten people that can beat a stock market index fund. so most people who lose their shirts.
That is a false inference. Failing to beat an index fund does not equal losing value.


it would get overvalued and returns in the future would suck.
Over valuation of stocks do not harm earnings.

In a sane market (free from government cave trolls smashing everything in the background) an abundance of investment capital isn't funneled endlessly into the same stocks but is used for actual investment. i.e. new companies, new factories, new mines, new ships, new power plants, etc...

That is why companies are publicly traded in the first place, to raise investment funds for expansion.


whereas with social security it's guaranteed.
... to be stolen, like it already has been, and as long as there is a single person left in the world who believes otherwise the horse is not dead and I will not stop beating.


in short, there's too many risks privatizing and too much guarantees and benefits to keepting it the way it is. 
All that was stolen has been lost. There is no recovering it. There is no benefit to continue the waste fraud and abuse. Continuing it guarantees nothing, produces nothing, only exasperates the problems it has been causing for decades.

The body will heal, given time, we just need to stop the blood letting of the witchdoctor collectivists.

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#10
n8nrgim
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@ADreamOfLiberty
artificial intelligence doesn't make all my arguments, but most of my arguments are argued better by AI on my behalf. 

This response is full of emotional rhetoric, but it lacks substantive economic arguments. Let’s break down the key flaws in their response:

### **1. "The government stole Social Security money"** 
- **Misconception**: Social Security funds aren’t “stolen.” The program is pay-as-you-go, meaning current workers' taxes fund current retirees. This has always been the system since Social Security's inception in 1935. 
- **Reality**: While surplus Social Security funds are held in government bonds (which critics call IOUs), those bonds are backed by the U.S. government—just like Treasury securities held by private investors and foreign governments. If they are worthless, so is the entire U.S. financial system. 

### **2. "Government causes inflation, so Social Security's COLA is meaningless"** 
- **False equivalence**: Inflation is influenced by multiple factors—monetary policy, supply chains, global markets—not simply government spending. 
- **Convenient dismissal**: Even if inflation exists, Social Security’s Cost-of-Living Adjustments (COLA) help retirees keep up with inflation. The alternative would be **no COLA at all**, which would devastate retirees dependent on fixed incomes. 

### **3. "The stock market is a better alternative"** 
- **Misrepresentation**: While it’s true that private investment can generate wealth, **most individuals do not have the skill, time, or risk tolerance to manage long-term stock investments effectively**. Studies show that individual investors underperform index funds due to poor timing, panic selling, and lack of diversification. 
- **Risk factor**: Private retirement plans rely on the market, which has **no guaranteed minimum benefit**. Social Security provides a floor that prevents elderly poverty, which the stock market cannot guarantee. 

### **4. "Most people don’t lose money in stocks"** 
- **Cherry-picked logic**: Yes, stocks generally grow over time, but **individual investors routinely lose money** by making poor investment decisions. The success of broad market indexes does not mean every person will benefit equally, nor does it address market crashes that could wipe out retirement savings at the wrong time. 
- **Longevity risk**: Unlike Social Security, **private accounts don’t guarantee lifetime income**—you can outlive your savings, whereas Social Security lasts as long as you do. 

### **5. "Overvaluation of stocks doesn’t harm earnings"** 
- **Oversimplified**: While stock overvaluation doesn’t necessarily reduce earnings, it does lead to **lower future returns** when valuations are high. If a privatized Social Security system led to massive stock purchases, prices would inflate, making new investments less profitable. 
- **Historical evidence**: The 2008 financial crisis showed what happens when financial bubbles pop—workers near retirement saw their 401(k)s drop by **40% or more**. Social Security prevented those retirees from falling into complete destitution. 

### **6. "Social Security is guaranteed to be stolen"** 
- **Defeatist argument**: Social Security has been paying benefits for nearly 90 years. If it were a “scam,” it would have collapsed long ago. 
- **Sustainability solutions**: While reforms (such as adjusting the payroll tax cap) may be needed, **abolishing Social Security doesn’t solve the problem—it creates a bigger one** by leaving millions of retirees without guaranteed income. 

### **7. "We need to stop the bloodletting"** 
- **Fear-based rhetoric**: This statement is purely ideological and doesn’t engage with actual financial realities. 
- **Lack of alternatives**: The response offers **no viable replacement** for Social Security. If it were abolished, what would happen to the millions who depend on it? Most private plans don’t provide guaranteed lifelong income, and a full shift to private investments would **disproportionately harm lower-income and less financially literate Americans**. 

---

### **Conclusion: A Weak, Emotion-Driven Rebuttal** 
This person’s response is **heavy on ideological outrage and light on practical solutions**. They ignore that: 
✅ Social Security is sustainable with proper adjustments. 
✅ The stock market is risky for retirees who don’t have decades to recover from downturns. 
✅ Inflation affects all investments, but Social Security adjusts for it. 
✅ There’s no viable replacement proposed—just anger at the current system. 

It’s easy to complain, but without a real plan, their argument collapses.

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#11
n8nrgim
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@ADreamOfLiberty
id also add, as with most libertarians, you are good at criticizing, but poor on providing alternative systems. you say we can invest in the economy, somehow. if you can detail how that can be done while providing guaranteed income and achieving all the objectives of social security, i'm open to listening to it. but that would require more than just criticism from u but rather a constructive policy proposal that's open to its own criticism. 
#12
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@n8nrgim
artificial intelligence doesn't make all my arguments, but most of my arguments are argued better by AI on my behalf. 
Well since I'm actually intelligent and not an illusion of intelligence I am not impressed or persuaded by either the AI blurb or the act of being a middleman.

If you want to act like a human being instead of a chatbot I'll evaluate your arguments.
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#13
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@ADreamOfLiberty
social security is pay as you go. it's not carnage what happened to it. yes polititicians borrowed from it, but they have to pay it back. worse case scenario, is that in eight years they will have to trim all benefits by fifteen percent. as the ai bot said, it's pay as you go, it's funded by current workers. also, you say we can find a way to do it privatized, but you dont say how that can be done while acheieving all the guarantees that currently exists with all the objectives currently acheieved by social security. as with most libertarians, you are full of criticism but light on solutions. 
#14
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@n8nrgim
id also add, as with most libertarians, you are good at criticizing, but poor on providing alternative systems.
It would be capitulation to fallacy to pretend as if an alternative is required before a fault can be identified.

If a man in 200 BC proposes to walk upon the moon by means of catapult, he's wrong. He's still wrong even if his critics don't know any other way to get to the moon.


you say we can invest in the economy, somehow.
How unrealistic of me to believe in such a thing as investment.


if you can detail how that can be done while providing guaranteed income and achieving all the objectives of social security
That would be a false standard.

The bar to beat is not the "objectives of social security" it is the actual outcome of social security.

In the real world, the world of physics and cold hard math, the best intentions don't matter and unrealistic goals are more of a hindrance than pessimism.

The "objectives" of social security may be to provide guaranteed quality of life through retirement, but the actual result of social security has been waste fraud and abuse which has harmed us all including the retired (through an ongoing process I have described many times but which can accurately be summarized as "theft" and which is generally referred to as "inflation".)

Everyone saving for their own retirement is necessarily better than the government claiming to save for your retirement but then wasting all the money and stealing a bunch more on top.

That does not mean there isn't an even better way than "everyone for themselves", but the existence and description of that better way in no way effects the objective facts that make social security immoral and impractical nor change the fact that it is those 'libertarian' economist's predictions which have, once again, proven true and accurate models of reality.

No one who supported social security when it passed predicted this moment we are living in. This moment was the prediction of the critics and naysayers, and people in the Austrian school of economics detailed exactly what theories made the prediction.

The failure of socialism (such as social security) is a scientific fact that socialist are and will continue to ignore until the bitter end, but recent events indicate that the majority does not want to wait for that bitter end.
#15
ILikePie5
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@n8nrgim
i already addressed that, and you didn't respond to it. only so much money can go into the market while still being profitable based on earnings. if too much goes it, it would be overinflated and lead to poor future returns. it'd be volatile too much. 
What do you mean “profitable based on earnings.” The stock market runs on perception of stocks. All you’re doing is basically just building another 401(k) which millions of people already do. It’s their money, they can choose to invest it in whatever they want, but they cannot withdraw before 65. At the same time make it an option to do this, not a requirement.
#16
ADreamOfLiberty
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@n8nrgim
yes polititicians borrowed from it, but they have to pay it back.
They have no money except what they steal. They don't have a right to steal anything, but even if they did there isn't enough to steal.

So they inflate and devalue their made up debts and the result is that the so called guarantee of comfortable retirement income is insufficient buying power.


worse case scenario, is that in eight years they will have to trim all benefits by fifteen percent.
Worst case scenario is hyperinflation and we've been on an express train straight to it. The people want it stopped, but whether the orange guy can figure out the giant obvious lever needed to do so or not is yet to be seen.

Also the benefits are going down because of currency devaluation. "cutting them by fifteen percent" multiplies against that diminished.


as the ai bot said, it's pay as you go
Same is true of pyramid schemes.


also, you say we can find a way to do it privatized
No, I'm saying theft is wrong and the immorally gained benefits of the theft were always based on a flawed economic theory.

It was a scam in every way something can be a scam. Neither dignity nor guilty pleasure remain. The fools who believed in social security and government safety nets stole an ice cream cone and then stored it in the baking sun.

There is no recovery and no reason to continue. It should be terminated at once, and if there are any left who voted for it (which I doubt) they should face criminal liability.


acheieving all the guarantees that currently exists
No guarantee exists. A legal duty exists for the government to provide currency, but they can and have made currency ever more worthless.

I can easily replace a false promise: I promise the sea god Neptune will provide for your retirement. There, I've just equaled social security.
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#17
n8nrgim
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@ADreamOfLiberty
you say a lot, but as the AI bot said, your responses are emotion driven, not fact driven. i pointed out to you that the worst case scenario for social security is that in eight years it will only be able to pay 87 percent of benefits. that's hardly the carnage and mountain of theft you make it out to be. it didn't live up to expectations but that dont mean it's a failure. you didn't respond to this simple but essential fact but rather drove into emotional fact free ideology. sure you dont have to provide a solution when criticizing someone else's system, but it makes your argument all that much weaker, cause social security is doing what it's suppose to do almost while achieving a lot of objectives that would be hard if not impossible to do elsewhere. that's the elephant in the room, and you refuse to address it. what's your alternative? also you dont seem to realize that most investors not only dont beat the market, they lose money. so if you simply let every man for himself, most people would be destitutue in retirement and we'd have the problem that had us make social security to begin with. 
#18
WyIted
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@n8nrgim
you are missing the point. if everyone invests in the s and p 500 it would get overinflated and the market would get dysfunctional. i
I isolated my point to a single statement you made in attempting to support a larger point. I never disputed your conclusion or stated an opinion on it
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#19
n8nrgim
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@ILikePie5
there are a couple things wrong with the way you look at what i said. if everyone just invests indexes and hopes future genrations do too, that'd be more of a ponzi scheme than what people currently call social security. eventually people would stop putting money it it. stocks are limited to how profitable they are, based on the stocks earnings. if everyone keep funneling money into indexes or certain stocks, the price of the stock would be super inflated and not tethered to the acutal earnings. it's like a ponzi scheme if it is divorced from fundamentals like profit, as investment advisors talk about. the other problem with your view, is instead of funnelling it into four o one k's or indexes as you say, we could just keep the current pay as you go system. that's the same difference, only it's a guarantee, and its not subject to the whims of people's voluntarily or not investing into a ponzi scheme stock market. 
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#20
n8nrgim
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@ADreamOfLiberty
do you not read articles about policy? it's a fact, the worse case scenario is that social security will only be able to pay out 87 percent of benefits in eight years. that's not perfect but it's hardly a failure, given there's no credible alternatives to consider and you refuse to list any. also you say worse case scenario is hyperinflation but where are you getting this? social security is funded by current workers... itll always be solvent even if it doesn't pay what we'd hope for. your hyper inflation argument doesn't seem tethered to a rational thought, and the rest of what you are arguing seems too emotion driven and devoid of facts to bother responding to. 
#21
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@n8nrgim
Other countries have mandatory investment programs that put money directly into the economy. See Canadian Pension Plan (CPP) and the Swiss pension system. Or the Australian pension system. Not much different from investing in the stock market.
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#22
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@Savant
"private equity" is a step in the right direction. 'everyone investing in an index fund' or 'every man for himself' type investing, are not good ideas or roads to go down. i'm not saying i'm opposed to the money being invested, it just needs to be explained how it'll work and how it'll offer benefits that exceed what social security already offers. 
#23
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@n8nrgim
Yeah, that's fair. I wouldn't say I'm totally opposed to everything you're saying, just that "if everyone invests in the s and p 500 it would get overinflated" isn't necessarily true. Or that there are probably workarounds.
#24
ADreamOfLiberty
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@n8nrgim
you say a lot, but as the AI bot said, your responses are emotion driven, not fact driven.
That is a non-argument from a non-intelligence. My assertions are true, my logic is strong, regardless of emotionally and morally charged language.


i pointed out to you that the worst case scenario for social security is that in eight years it will only be able to pay 87 percent of benefits.
...and in your mind this is a "fact"?

The Social Security trust funds are invested entirely in U.S. Treasury securities.
US treasury securities are "IOUs" from a criminal organization that has continuously gone deeper into debt for decades. If it was a company its credit would be: absolutely none. However it's a giant criminal organization with a ton of guns and people it can force protection money from.

The only asset the US government has is its ability to use force to steal.

When you add that up social security has NOTHING but the promise of extorting the people of the united states and the world. Which is to say NOTHING.

So let's go back to your quote
in eight years it will only be able to pay 87 percent of benefits.
Noo, not eight years from now, eighty years ago it was able to pay 0 percent of benefits. Yet despite having nothing of its own to pay with, it stole the value to pay out. That is what has been happening, that is what will continue to happen.

The only thing that will happen in eight years is that the inflation caused by the rampant government spending of stolen wealth will reach the point that this mafia bookkeepers shell game won't even balance anymore.


you didn't respond to this simple but essential fact
I have several times, most detailed above. The reason it isn't working is because they didn't invest in production, there was no check on their theft and they used the money for power and to distribute through a million branching veins of corruption.

They took and took and produced nothing. The government sells nothing (but weapons and threats), the government owns nothing that produces (without quickly converting it to an organization that stops producing).

If the social security administration had been sitting on a pile of gold bars or a giant portfolio of real estate and stocks then it would only be one layer of theft. If further it paid out in real value rather than fixed currency then there would be no fraud.

Then perhaps you could say (correctly) what you have been saying about it running out of money and being unable to meet its obligations.

That is not reality. They have no assets. Their payouts are devalued.

It is a giant pyramid scheme with the admixture of looming threats of violence (try paying employees without withholding for social security).


sure you dont have to provide a solution when criticizing someone else's system
Well there is some progress.


but it makes your argument all that much weaker
Never mind, you still don't understand. It doesn't weaken my arguments in the slightest. There is no logical connection.


cause social security is doing what it's suppose to do
Providing cover for mass theft? That's all its doing.


almost while achieving a lot of objectives that would be hard if not impossible to do elsewhere.
If you mean providing cover for mass theft (money laundering) then I supposed it was fairly successful, but many other schemes have also been working quite well. See military spending, medicare, medicaid.

If you mean providing people a benefit, no. It has necessarily taken more than it ever has or ever will give back. There may be isolated examples of profoundly inefficient redistribution but in the vast majority of cases people would have been better off if they had just been allowed to keep the money.


what's your alternative?
My alternative to stealing is not stealing.
My alternative to wasting money is to not waste money.
My alternative to lying to the public is to tell the truth to the public.
My alternative for not investing money in further production (profitable investment) is to invest in further production.

My alternative for a lying, wasting, defrauding social safety net is any social safety net that does not steal from, waste the effort of, and defraud the public.

If such an alternative cannot exist (it can), then a society without a social safety net is preferable.


also you dont seem to realize that most investors not only dont beat the market, they lose money.
Amateur day traders lose money. Stock trading is a gambler's game. Holding onto stocks of profitable companies is not a gambler's game. Dividends from stable companies are stable investments.

Investment firms (in a real market) have subject matter experts who pick out good investments. The portfolios as a whole are as reliable as the economy itself.

Do you know what makes economies unreliable? Governments. Governments stealing, governments getting into trade wars, governments starting wars.


so if you simply let every man for himself, most people would be destitutue in retirement
The premise false false and thus the conclusion is unsupported.


we'd have the problem that had us make social security to begin with. 
Government made social security to solve a problem government interference in the market created.
#25
ILikePie5
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@n8nrgim
there are a couple things wrong with the way you look at what i said. if everyone just invests indexes and hopes future genrations do too, that'd be more of a ponzi scheme than what people currently call social security.
I never said just stocks. You can invest in a portfolio of assets and difference asset classes. Diversification is key to any portfolio.

eventually people would stop putting money it it. stocks are limited to how profitable they are, based on the stocks earnings.
That’s not true. Most stock valuations even right now are far above their intrinsic valuations.

if everyone keep funneling money into indexes or certain stocks, the price of the stock would be super inflated and not tethered to the acutal earnings. it's like a ponzi scheme if it is divorced from fundamentals like profit, as investment advisors talk about.
By that logic, no one should invest in the stock market because true values do not equal intrinsic valuations. And the issue with this statement is that you’re right, returns would fall, but that means other assets are worth more because opportunity cost always exists. If flooding money into an 8% return asset brings the return down to 6%. I take my money out and put it into a 7% asset, and the cycle goes on and on.

the other problem with your view, is instead of funnelling it into four o one k's or indexes as you say, we could just keep the current pay as you go system.
And that system is going to be insolvent very soon. So that’s not an option

that's the same difference, only it's a guarantee, and its not subject to the whims of people's voluntarily or not investing into a ponzi scheme stock market. 
The stock market isn’t a ponzi scheme lol. Youre also forgetting that stocks aren’t perpetual. Some go away and new ones take its place. So on and so forth. And people get to choose where to put their money. 
#26
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Yeah, that's fair. I wouldn't say I'm totally opposed to everything you're saying, just that "if everyone invests in the s and p 500 it would get overinflated" isn't necessarily true. Or that there are probably workarounds.
There is a workaround because a million other asset classes and indices exist, as well as a million stocks with consistent results. You diversify the assets. It’s literally how a retire fund for teachers works.
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Money is a make believe concept, that was once recorded in books and represented using metal discs and bits of decorated paper....But is now largely consigned to the fantasy realm of electronic symbolism, cards and apps. 

All rather tenuous if you think about it. 

Might be prudent to convert some of your electronic money back into shiny bits of metal.

Which, if the shit were to ever hit the technological fan, would certainly appreciate like gold dust.


As for privatising social security....Seems like a contradiction in terms.

Just amounts to paying someone else to do something that someone else was already paid to do.

Because the private sector sure as hell, ain't  going to fund social security with it's own dosh, for nothing.


I expect that eventually an AI will suss things out and flick the off switch.

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The guarantees it provides...
Like the guarantee that the SS trust fund will run out of money in 2033?

According to the 2024 Social Security Trustees Report, the Old-Age and Survivors Insurance (OASI) Trust Fund is projected to be depleted in 2033. At that time, incoming revenues would cover approximately 79% of scheduled benefits. 
Additionally, the Congressional Budget Office (CBO) projects that the OASI Trust Fund will be exhausted in fiscal year 2033. The Disability Insurance (DI) Trust Fund is expected to remain solvent until 2064. 
These projections indicate that, without legislative action, Social Security may face significant funding shortfalls starting in 2033.

 the problem, is that most people lose money in stocks
False. If that was the case, your 401k manager would have an entire portfolio with a 100% investment in government bonds.

Yes, Social Security (SS) is essentially an investment in government bonds, specifically special-issue U.S. Treasury securities. These are non-marketable bonds that the SS Trust Fund holds, earning interest at an average rate of around 2% to 3% annually. This yield is low but stable, as government bonds are considered a low-risk investment. In contrast, the stock market, represented by the S&P 500, has historically returned around 7% to 10% annually over the long term (after inflation), making it a far more profitable investment but with greater volatility. While SS’s bond-based model offers stability, it also means the fund’s growth is limited by the lower returns. If Social Security were partially or fully privatized, allowing investments in the stock market, it could potentially achieve much higher returns. While this would expose individuals to market risks, the overwhelming majority of people still choose to have retirement funds with greater returns than just bonds.

While surplus Social Security funds are held in government bonds (which critics call IOUs), those bonds are backed by the U.S. government...
While it's true that surplus Social Security funds are held in government bonds, which critics often refer to as "IOUs," the problem lies in the fact that these bonds are backed by the U.S. government’s future ability to generate revenue. In theory, these bonds are just as secure as any other Treasury securities, because they are guaranteed by the U.S. government. However, the core issue is that they represent debt rather than actual assets. The money the government takes in from Social Security taxes is spent on other federal programs, and in return, the Social Security Trust Fund holds these bonds as evidence that the government owes the program that money.

The problem with this setup is that while the bonds are backed by the government, they don’t actually create wealth or grow on their own. (because the government doesn't actually produce anything with bond debt, it redistributes from producers to those that produce way less or produce nothing.) Instead, the system depends on future tax revenues to repay these bonds, but there’s no real pool of invested capital that will continue to earn a return and provide a steady source of funds. The 2-3% return on government bonds is actually founded on the valuation of US currency which rises through planned inflation by increasing the supply of money relative to demand, but it doesn't generate real wealth. While it offers a low-risk way to preserve purchasing power, the return often barely outpaces inflation, meaning the real growth of your investment is minimal. Compared to market-based investments like stocks, which historically offer higher returns, bonds mainly serve to protect the value of money rather than create significant wealth over time.This creates a scenario where the U.S. government must raise taxes or borrow more to cover the growing obligations to Social Security as more baby boomers retire and fewer workers contribute.

By 2033, Social Security’s trust fund is projected to be depleted, and the program will rely entirely on payroll taxes coming in. At that point, without changes to the system, the government will either need to raise taxes, reduce benefits, or borrow more, creating a cycle of debt that is unsustainable. While the bonds are technically backed by the U.S. government, the real problem is that Social Security is functioning like a Ponzi scheme: it requires an ongoing influx of new money to pay benefits, and when the flow of new contributions slows down or can't keep up with growing obligations, the system will run into trouble.

if you simply let every man for himself, most people would be destitutue in retirement and we'd have the problem that had us make social security to begin with. 
While it’s true that Social Security was created to prevent widespread destitution in retirement, the argument that "every man for himself" would lead to widespread poverty doesn’t account for the fact that most people are already comfortable relying on private retirement savings, particularly through 401(k)s and other market-based investments.

The vast majority of workers today contribute to private retirement accounts, where their funds are invested in the stock market, bonds, and other assets that, over time, historically provide a higher return than the low, guaranteed return offered by government bonds in the Social Security system. While it's true that stock market investments carry some risks, the average returns over time have been substantial enough to provide most people with a comfortable retirement if they start saving early enough. The market has consistently outpaced the growth of Social Security benefits, and many people today prefer the opportunity for higher returns than the limited, risk-free options provided by the Social Security Trust Fund.

The problem with Social Security isn’t necessarily the idea of individual responsibility, but the structure of the system itself. By relying on government bonds and pay-as-you-go funding, the system is unsustainable as it faces demographic shifts like an aging population. A shift towards private investments, where individuals can grow their savings based on their own risk tolerance, would allow for greater flexibility and potentially higher returns, making it a more effective way to prepare for retirement without burdening the government’s fiscal capacity. Most people today are already comfortable with the idea of personal investment responsibility, and with proper financial literacy, they are capable of managing their own retirement funds in ways that could lead to better outcomes than relying on Social Security alone.

 but most of my arguments are argued better by AI on my behalf. 
Lol, no, they really were not. You have to include a ton of bias filters to get an AI response that excludes the obvious problems that are objectively leading to the projected 2033 insolvency of SS. Try steelmanning next time.

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The stock market isn’t a ponzi scheme lol. Youre also forgetting that stocks aren’t perpetual. Some go away and new ones take its place. So on and so forth. And people get to choose where to put their money. 
Bonds are such a garbage investment and usually only included in a diversified 401K as a poor hedge against predictable inflation.
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if the private sector did social security, it would probably use annuities.
I just read this.... your original presumption is laughably false.

Estimates suggest that only about 2-5% of 401(k) participants use annuities as part of their retirement portfolio. While some 401(k) plans may offer annuities as an option, the vast majority of people choose to invest in stocks, bonds, or mutual funds, which are typically seen as better options for growth and flexibility in retirement savings. Why would you claim this would be the "probable private sector investment?"