Resolved: The United States Federal Government should privatize Social Security

Let us get back to the debate. Contention 1: Harming Retirees My opponent argues that Privitazation would harm the retirees, but this is fallacous. I have shown last round they will be given an oppertunity to do with it as they please as they will have full ownership of the money in their private accounts. [1] With the ending of the government monopoly on the issue they can chose to do a multitude of things from investing in the stock market to banking or from investing in things like existing Roth IRAs and 401K plans. We would have to realize that opening the market will allow a multitude of new businesses to rush in and take over helping the Senior Citizens and look out for their best interstests. Not to mention that you would be able to own your own accounts. Just as a Legal immirgrant was denied any sort of Social Security even though he was a registered US citizen and he paid taxes, but was dennied his SS benefits, but under privitization these options are open to anyone. [2] My opponent fears a stock market SS option, but that is a rediculious fear. We have seen that upon an investment you can see an anuall growth of 11% of your account showing a great deal of economic growth. That's just without a large investment if this plan is ennacted. [3] Let's do some generic math here to see the net benefit or loss from this. -The average stock grows 10% each year. [4] -Average dividend is 3%[5] -Inflation is about 3.2% [6] So mathematically we can expect to see an average of 9.8% growth in earnings each year while the individual under Social Security would be at 2.7-3.2%. Which after 42 years (from age 18-60) under this plan you'll get $711,000 vs. if you just stuck with the status quo Social Security you can get the maximum of $118,500. [7] Even if this cap is eliminated under this estimate under my opponent's system it will only rise to a whopping $126,000. Not to mention that this is just simply the average stock vs. SS max. Can you image if you get better than normal? You'd be a millionare. We can see that on the Solvency here and the balance of the impacts my plan outweighs my opponents. We can see that this would be a gradual thing that will be phased out of in 10 years. Last year Social Security ate up 26% of the US budget with $906 billion and this number is growing. Funding will simply come from the existing SS budget as the number will sink as the accounts are being privitized. [8] Contention 2: Privatization I know that my system hasn't been tried anywhere, but that doesn't mean that it would outright fail. How do you think we've gotten to the moon. With that I will move on to some of the examples that my opponent has brought up to show why he is incorrect and ommitting a great deal of the truth from you. The first part is that people are mishandling their money by seeing that as people can choose when they want to retire they have to pay a higher amount of taxes. Some people take a higher tax burdern to retire quickly where the max age is 65 for males and 60 for females and the workers can choose to invest up to 20% in to this Pay as you go system, which mind you isn't the same system as mine since it still contains the Public Option while I'm phasing out from public to private. This leaves no government option. So the Chilean Expirament is like mine, but is not the same so my opponent may argue against this, but there is no direct link since the public option still exsists and even Jose Pinera Chile's former Secretary of Labor and Social Security. What adds to his stature was that his administration lasted through the transition. [9] In the country no AFP (spanish accronym for Pension Fund Administration) has gone under in the 14 years that the country has been doing this plan and no worker has lost a dime. The only reason, Pinera claims, that there is a loss reported was due to the financial crisis and lack of consumer confidence. [9] Not to mention this plan has caused the nation to see a 2% Gross Nation Product increase each year in this span. This, what they call Capitalization, has greatly helped the nation by them changing from Socialistic policies to that of the Chicago Boys and slowly adjusting over the years. Now why does this actually matter that I am arguing this? It's a reflection of the current state transition from State controlled Monopoly on the Social Security down to the private control. You'll have to forgive me as I'm running out of characters here for the rest. On to Galveston. We can see that it did this out of the fact that the US Congress was not doing anything to combat the growing Social Security issue that was arrising in the 1970s, so they acted. The Alternative Plan in Galveston is actually still in effect today and for the past 18 years people in the three Texas counties have seen a 6-6.5% return on Social Security compared to the 2-3%. [10] Contention 3: Counter Plan I agree with my opponent that something here needs to be done, but his purposal is purposterous and will wreck the economy. We currently see that the tax rate is currently 6.20% for Social Security and Medicare is approximately 1.45%. We can see that the tax rate wouldn't go up by 0.7%, but we would see a jump to at least 9% in order to cover the Social Security Costs over the next 75 years. Economicst Emmanuel Saez and Jefferey Libberman have found that even if we eliminate the Tax Cap we can still see a 40% short fall of SSA statistics. [11] So even if Con's plan is enacted it wouldn't improve the situation, but actually make it worse. He also found that if any raise did occur then they actually found that poor women would actually have a negative earnings and their money that they would be pooring into the system would be worth a whole lot less then if it was implamented. Not only was it found that the nation would get less income from the taxation, but people in the long run tended to end up with less money on this plan than the SSA's by $1,000s at many times and begins to stagnate around those who make $60,000 and up. [12] We can actually see that one of the key things we have here is that those above the Tax Max make well less than those who pay into the system. It turns out that those over tend to make a whoping 5% over the tax limit while the rest make out richer in the end. We can also see that with the current federal tax bracket there is 45% tax rate for the top bracket. [13] After the increase at federal and state level which includes raising the tax rates to accomidate this we can see they will wind up with an overal 12% tax increase to the point to where they are tax higher than those in Scandinavia and we still wouldn't see Substantial solvency in the long run still leading to this counter-plan to be a failure. [14] Not to mention that this plan still doesn't solve for much of the issues with current Social Security Standings as not only is it worse, but we can see that there's still holes in it. We can still see that in the long run we will still see a Bridge Payer system here and with the US population growing older we can see that this issue will only continue to grow worse and the problem needs to be fixed now. Just as under Con's plan and the Status Quo, the US Federal Government can still use the SS funds to do whatever they want with it as they please and for many Americans it will just seem like another way more money is being squeezed out of Americans and our Senior Citizens still won't see a dime. [15] Not to mention if they die before they reach the age that they would be able to receive it, under Con's Plan just as the Status Quo, the funds would dissolve, but under my plan, as I have shown last round, will move to the clostest living relitive. Sources 1. (Michael D. Tanner, "Is There a Right to Social Security? ," cato. org, Nov. 25, 1998) 2. (Social Security Administration, "Social Security History: Supreme Court Case: Flemming vs. Nestor," ssa. gov (accessed Aug. 17, 2015) 3. Aswath Damodaran, "Annual Returns on Stock, Bonds and T-bill’s: 1928 - Current," New York University Stern School of Business website, Jan. 5, 2015 4. (. http://usatoday30.usatoday.com...) 5. (. http://pages.stern.nyu.edu...) 6. (. http://inflationdata.com...) 7. (. http://www.kiplinger.com...) 8. (Courtney Baird, "Diving into the Deficit," Committee for Economic Development website, Nov. 6, 2014) 9. (. http://www.cato.org...) 10. (. http://www.texaspolicy.com...) 11. ( . http://eml.berkeley.edu...) 12. ( 1 Saez (2001) shows, when deriving the optimal non-linear marginal tax rate formula, that the same Laffer rate formula applies when considering a local marginal tax rate increase exactly as in our 90% of earnings)13. (. http://fee.org...) 14. ( Andrew G. Biggs, “Entitlements: Not Just a Health Care Problem,” AEI Retirement Policy Outlook (August 2008), www. aei. org/outlook/28443. See also Congressional Budget Office, The Long-Term Budget Outlook (Washington, DC, June 2010), www. cbo. gov /doc. cfm? index=11579 (accessed March 8, 2011). 15. ( Michael Tanner, "Privatizing Social Security: A Big Boost for the Poor," cato. org, July 26, 1996)26, 1996)