Report

The Perils of Privatization

OurFuture.org Staff — Mon, 04 Aug 2008 12:08:08 -0700

An idea to radically change Social Security that has already been soundly rejected by the American people—privatization—is being resurrected. If its proponents succeed, 8.6 million older Americans would lose a safety net that keeps them from falling into poverty, according to research released by the Institute for America's Future.

Three years ago, President Bush declared that Social Security faced a financial crisis, and his solution was privatization — taking payroll taxes we all pay into the system and investing a portion of those funds in private stock market accounts.

Now Senator John McCain is bringing the idea back. In March 2008, McCain told the Wall Street Journal, "As part of Social Security reform, I believe that private savings accounts are a part of it — along the lines that President Bush proposed." The idea became more concrete in July 2008, when McCain named economist Martin Feldstein, the "chief intellectual force behind privatization," as a surrogate on his campaign.

In a town-hall event on July 7, 2008, when McCain was asked about the future of Social Security, McCain criticized the fundamental design and structure of the program. He said: "Americans have got to understand that we are paying present-day retirees with the taxes paid by young workers in America today, and that's a disgrace, it's an absolute disgrace and it's got to be fixed," he said.

This report updates research previously published by the Institute for America's Future. It estimates the reduction in Social Security benefits that a typical United States resident can expect and the number of seniors exposed to poverty if Social Security were privatized. The main findings are that for future generations, Social Security privatization would:

Cut lifetime benefits by $240,264
Make 8.6 million senior citizens vulnerable to poverty.

Read the United States report.

Read reports on the impact on: Women | African Americans | Hispanics

Read the state reports:

Alabama Report | News Release
Alaska Report | News Release
Arizona Report | News Release
Arkansas Report | News Release
California Report | News Release
Colorado Report | News Release
Connecticut Report | News Release
Delaware Report | News Release
Florida Report | News Release
Georgia Report | News Release
Hawaii Report | News Release
Idaho Report | News Release
Illinois Report | News Release
Indiana Report | News Release
Iowa Report | News Release
Kansas Report | News Release
Kentucky Report | News Release
Louisiana Report | News Release
Maine Report | News Release
Maryland Report | News Release
Massachusetts Report | News Release
Michigan Report | News Release
Minnesota Report | News Release
Mississippi Report | News Release
Missouri Report | News Release

Montana Report | News Release

Nebraska Report | News Release

Nevada Report | News Release

New Hampshire Report | News Release

New Jersey Report | News Release

New Mexico Report | News Release

New York Report | News Release

North Carolina Report | News Release

North Dakota Report | News Release

Ohio Report | News Release

Oklahoma Report | News Release

Oregon Report | News Release

Pennsylvania Report | News Release

Rhode Island Report | News Release

South Carolina Report | News Release

South Dakota Report | News Release

Tennessee Report | News Release

Texas Report | News Release

Utah Report | News Release

Vermont Report | News Release

Virginia Report | News Release

Washington Report | News Release

West Virginia Report | News Release

Wisconsin Report | News Release

Wyoming Report | News Release

More facts are in our Making Sense alert on Social Security privatization. Also browse the Social Security section of our website.

Bush Privatization Plan Would Devastate State Economies

Scott Laczay — Mon, 10 Dec 2007 12:44:59 -0800

Because Social Security is such an important part of the economic well-being of older Americans, the benefit cuts included in the president's privatization plan would increase senior poverty dramatically. A new generation of poor seniors would place unprecedented demands on already stretched state budgets — squeezing out funds for top state priorities. This would likely lead to higher state taxes to pay the price of providing these new poor seniors with the healthcare, nutrition and housing they can no longer afford themselves.

CLICK ON YOUR STATE TO READ THE REPORT

ALABAMA	ALASKA
ARIZONA	ARKANSAS
CALIFORNIA	COLORADO
CONNECTICUT	DELAWARE
FLORIDA	GEORGIA
HAWAII	IDAHO
ILLINOIS	INDIANA
IOWA	KANSAS
KENTUCKY	LOUISIANA
MAINE	MARYLAND
MASSACHUSETTS	MICHIGAN
MINNESOTA	MISSISSIPPI
MISSOURI	MONTANA
NEBRASKA	NEVADA
NEW HAMPSHIRE	NEW JERSEY
NEW MEXICO	NEW YORK
NORTH CAROLINA	NORTH DAKOTA
OHIO	OKLAHOMA
OREGON	PENNSYLVANIA
RHODE ISLAND	SOUTH CAROLINA
SOUTH DAKOTA	TENNESSEE
TEXAS	UTAH
VERMONT	VIRGINIA
WASHINGTON	WEST VIRGINIA
WISCONSIN	WYOMING

Rural Communities Rely on Social Security Income Nearly TWICE as Much as Non-Rural Communities

Scott Laczay — Mon, 10 Dec 2007 12:43:48 -0800

Rural Communities Rely on Social Security Income Nearly Twice as Much as Non-Rural Communities

The President's Social Security privatization proposal would devastate America's rural communities. With higher percentages of senior citizens, residents who depend on Social Security's disability insurance, and elderly women, rural communities depend on income from Social Security nearly twice as much as non-rural communities. Currently, 13 percent of rural seniors live in poverty, whereas only 9 percent of seniors in metropolitan areas are poor. Poverty also increases as seniors age, with fully one fifth of rural seniors over age 85 living in poverty. Social Security is crucial to the economic independence of rural seniors who have worked hard and paid taxes for their entire lives. Cuts to Social Security benefits would swell the ranks of the rural poor to levels not seen since the Great Depression. Read how Social Security privatization will hurt rural communities in your state:

NATIONWIDE
ALABAMA	ARKANSAS
CALIFORNIA	COLORADO
FLORIDA	GEORGIA
IDAHO	ILLINOIS
INDIANA	IOWA
KANSAS	KENTUCKY
LOUISIANA	MAINE
MARYLAND	MICHIGAN
MINNESOTA	MISSISSIPPI
MISSOURI	MONTANA
NEBRASKA	NEVADA
NEW HAMPSHIRE	NEW MEXICO
NEW YORK	NORTH CAROLINA
NORTH DAKOTA	OHIO
OKLAHOMA	OREGON
PENNSYLVANIA	SOUTH CAROLINA
SOUTH DAKOTA	TENNESSEE
TEXAS	UTAH
VERMONT	VIRGINIA
WASHINGTON	WEST VIRGINIA
WISCONSIN

Will Social Security Privatization Return?

Scott Laczay — Mon, 10 Dec 2007 12:41:39 -0800

Scorecard on the large number of candidates who support privatization of Social Security – and prospects for a new congressional majority that could dismantle Social Security.

Read the full report »

Private Accounts Would Substantially Increase Federal Debt and Interest Payments

Ian Mishalove — Tue, 26 Jul 2005 21:00:00 -0700

The DeMint and McCrery Social Security Plans

Ian Mishalove — Tue, 19 Jul 2005 21:00:00 -0700

African American Women Depend Heavily on Social Security

Ian Mishalove — Tue, 31 May 2005 21:00:00 -0700

Social Security Lifts 1 Million Children Above Poverty Line

Ian Mishalove — Sun, 01 May 2005 21:00:00 -0700

Why the President's Social Security Proposal Could Ultimately Lead to Unraveling of Social Security

Ian Mishalove — Sun, 01 May 2005 21:00:00 -0700

Privatization = $152,000 Cut in Social Security Checks for Typical American

tjackson — Sun, 01 May 2005 10:44:07 -0700

Our state-by-state reports conclude that the President's plan would have a devastating impact on the economic security of American families. The President's plan would impose benefit cuts of 15 percent for a 45-year-old worker today, cuts of 25 percent for a 35-year-old worker today and a typical 20-year-old worker, who has just begun paying into the Social Security system, can expect to see a cut of $152,000 over their retirement. The plan would saddle young workers with both the cost of crippling national debt and with severe reductions in the amount they can expect to see from their Social Security checks. Social Security is the most successful anti-poverty program in our nation's history — and it is a benefit earned by every single American after a lifetime of hard work.

CLICK ON YOUR STATE TO READ THE REPORT

ALABAMA

ARIZONA

CALIFORNIA

CONNECTICUT

FLORIDA

HAWAII

INDIANA

KENTUCKY

MASSACHUSETTS

MONTANA

NEVADA