The Instigator
Con (against)
12 Points
The Contender
Pro (for)
2 Points

Social Security R.I.B Should be Privatized

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Voting Style: Open with Elo Restrictions Point System: 7 Point
Started: 5/4/2016 Category: Economics
Updated: 2 years ago Status: Post Voting Period
Viewed: 1,041 times Debate No: 90705
Debate Rounds (4)
Comments (2)
Votes (4)




No kritiks or semantics
BoP shared

Contention: Privatization of Social Security Retirement Insurance Benefits (RIB) would be disastrous due to risk, the need to raise taxes and its contribution to the national debt.

Risk: Looking at past recessions, stock market crashes and changing monetary policy in just the last 30 years proves there’s risk involved in changing Social Security RIB to a Private Plan (PP). A person can lose initial investment as well as gains in the markets.

The early 1980’s recession was due to monetary policy [1]. In August 1987 markets began to slide, by Oct. 19th, Black Monday, the market took a 22.5% loss in one day; measured total fall of 36.7% [2]. In 1990-92 there was the S&L crisis with a Fed bail out [3]. The DOT com bubble burst of the 90’s is another example [4, 5]. Lastly, the more recent 2008 housing and financial crash where the stock market fell 2400 points in a week [6]. At each occurrence those with mature investments ready to retire took a big hit. Waves of unemployment resulted with decreased or halted contributions, and sometimes liquidation of retirement assets was enacted to stay afloat. In the last crash, those within 10 years, or broaching retirement loss 20% of their retirement investment with little or no time to recoup losses. Either way, that money is lost never to return; recoup means to get to a previously held level [7]. If you retire during an economic down turn you may not have sufficient funds to last. The risk defeats the purpose of the social security safety net.

Under Funding Current Insurance Liabilities: Shifting funds to individual accounts, a PP, would take away funds from the current millions of spouses, dependent children of the deceased, as well as the disabled [8]. Furthermore, current influx of funds supports the now retired. How would the government fund current RIB payments of the near future and presently retired? A PP would only apply to those coming into the work force anew. All those currently working and contributing to the traditional RIB would be a part of the old system for decades to come. The Social Security RIB is estimated to take 75 years for complete solvency if privatization is enacted [14]. No one has a crystal ball on the changing tide of the economy, the government or the will of the people over that span of time.

For a PP to be implemented the Gov would need to decrease current payouts and borrow to cover current liabilities with the diversion of taxes going to individual accounts [17], also raise payroll taxes [11]. Currently a portion, approximately 1 out of 5 SS dollars, goes into the SS Trust Fund to pay future benefits [9]. If current money goes into individual accounts contributions to the Trust Fund will cease and its present balance will be depleted far more quickly that the expected 2058 [10, 15].

A.) Net Loss: To fund current and near future payments government borrowing and cut in services will not be enough. A raise in SS taxes would be needed. Monies will go into PPs for the future and the tax increase will support the current pool as well as subsidize low income workers contributing to PPs to ensure minimum retirement income [14 p.27]. Privatization will have the payer contributing to both ends rather than the current pay-as-you formula. The increase in tax against balance in private accounts could produce a negative gain effect [13]. Government borrowing for transition cost, which is estimated to be 10 trillion, will contribute greatly to the already ballooning national debt [14 p.29].

Various proposals have been made on how privatization would be structured, either by a centralized government entity or open market competition. I’ll examine the lesser of two evils in this round.

Issues with Centralized Privatization: A centralized government plan would certainly decrease some of the administrative and broker’s fee associated in typical investment market purchases, but who will decide what the options for privatized accounts will be? Financial institutions will have political influence in Washington [15, 16]. Considering the S&L debacle of the early 90’s, the financial industry’s complicity in the 2008 crash and following bail out at tax payer expense, they can’t be trusted to act in our best interest. The lure of all working Americans contributing to private accounts where profits that can be made is too tempting. To say a reoccurrence of a stock market or financial institution crash and bail out will not occur again is a fallacy; history has bore this out [14]. Not only will we, the tax payer, be bailing out the financial sector again, loose all or most of what is in our PPs but, also have to pay to replenish the system for it to continue.

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This round I shall work on my Case and with the character restriction I will appoligies if I run out of room and have to cut a few things short

Contention 1: Social Security flawed and will crash.

When Social Security was created the US federal government made a profit from it as there was 25 people paying for 1 person that recieved Social Security. Now it is nearly a 3 to 1 person and if something isn't done soon the system will be bust as there's no way that a 2 to 1 or even 1 to 1 ratio could work. The reason this is occuring is that the Baby Boomers are starting to retire also we have lower birthrates which have massively declined since the Row V Wade decission. [1] Since 2010, the US income that they would generally make off of Social Security has evaporated and they began loosing money. The Treasury reports that by 2034, the US funds will run out and eventually Social Security will engulf the entire US budget. [2]

Although Social Security only takes up 13% of the US Budget by 2020 its expected to be up to 29%, by 2030 it's suppose to be 49% and if this trend continues then in 2080 it will consist of 89% of the US budget. [3] Alternatives that is not ran by the government needs to be found in order to protect our nation's welfare. Another key issue is that of taxes. When Social Security was created the taxes was $3,000, but now it is a whopping $118,000 which rose 700% higher than inflation showing how much harm it is preforming on the system. [4] It has risen to 12% for many self-employed and small business owners harming our business and industries. The privatization will solve for this issue and will boost economic growth in the process.

Contention 2: Privitization solves.

One of the greatest tragedies of today's market system is that the government is trampling our right to Choose. In the 1990's a think tank came together and found that the US should privitize social security. Bill Clinton and Newt Grinrich came together to discuss this issue and they came to to an agreement though nothing came of it as it disappeared from the Congressional agenda after the Contract with America. If privitized people will see a larger investment for a cheaper cost. Research has found with trials in Texas and Florida that with the privatization there is a 11.5% yearly growth where the current rate of Social Security is 2.5%. [5] That's a huge difference and it's more money you can use when you retire and maybe you can even retire earlier. Martin Feildstein, former US Treasurer has found that, "someone with $50,000 of real annual earnings during his working years could accumulate enough to fund an annual payout of about $22,000 after age 67, essentially doubling the current Social Security benefit." This was only at a 5.5% increase as well. [6]

A Gallup poll found that 60% of Americans believed that they will not see their retirement money from Social Security. Why's that you may ask? It's simply the matter the fact of governmental interfearance in these accounts by "reaching into the cookie jar" when they are sore on funds, but they do this in boom and bust. Privatization will transfer full control to the individual and they will have the money. [7] Unlike the status quo, when you die, your Social Security funds will be transfered down your inheretance line to your family, so you are able to still use it instead of being like the South Park Cartoon "Aaaaand it's Gone." [8]

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]
Concidering that it takes 26% of the budget such a task would be a simple phase out over the span of 10 years as I have already addressed.

When the New York Times reporter visited a small town in Chile he found that,

(1)Retire in 10 years, at age 62, with an annual pension of $55,000. That would be more than triple the $18,000 I can expect from Social Security at that age.

(2)Retire at age 65 with an annual pension of $70,000. That would be almost triple the $25,000 pension promised by Social Security starting a year later, at age 66.

(3)Retire at age 65 with an annual pension of $53,000 and a one-time cash payment of $223,000." [11]

Investors Business Daily had also found that in Chile in the past 30 years that the annual rate of return is 9% compared to the 1-2% here in the US. [12] We can already see that this sucess has been drowned out by criticisms that doesn't speak to the amount of sucess reached here. We can see that it was coastly, but that was paid off and not to mention that the short term pain turned into massive long term gains ranging from massive returns on pensions to doubling and even trippling of the nation's growth rate. [13]

1. ( Social Security Administration, "Frequently Asked Questions: Ratio of Covered Workers to Beneficiaries," (accessed Aug. 17, 2015)
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Debate Round No. 1



1: Yes/No: SS might go into the red due to baby boomers retired/retiring against the low numbers supporting their retirement, but there are other contributing factors.

Issues affecting SS Old-Age and Survivors Insurance OASI (RIB when paid out), is more insidious than ratios. First, the gov borrowed $2.5T from the fund between 1970-1983 [19] issuing Treasury Bonds against the loans. From 1983-2000 the SS Trust Fund TF was at a surplus [20] and could fund the boomer’s retirement into the future. G.W. Bush saw the surplus and cut taxes reducing influx of finds [21].

Despite decreases funding to OASI it is self perpetuating with its balance and funding at current rates. TF depletion will not start until 2024. In 2015 the fund ran at 308% above cost, by 2024 it’s expected to be at 171% [22]. Pro’s cit.#2 states this.

Projected short fall is due to Disability Insurance DI, a separate fund from OASI, soon to be depleted. The Trustees recommend OASI merge with DI so funds are available for DI future liabilities. The pooling of funds resulting in depletion of both systems by 2035; combined factors increase of boomers retiring and DI outlays [22, 23];robbing Peter to pay Paul.

There’s no denying there’ll be an issue with OASI/RIB in the future. It’s probable the 2 funds will be merged, but privatization is not the answer. Pro’s cit.#3, the NCPA, “The NCPA’s solutions promote private alternatives to government regulation and control”. The author, Pamela Villarreal is a NCPA analyst/writer, not unbiased. Privatization at whose expense? Who will profit and benefit? The gov does not have a profit motive. Present admin expenses of SS is at 1% [24].

2: Choice is good, but who will determine what the options will be? Which system will be chosen; a centralized gov system or private financial? As stated in R1, There’s no denying that the financial sector will have sway [15,16,25]. They have a poor track record in protecting the public interest, remember 2008?

Please explain how a larger investment is made at a cheaper cost? In the par.1, Pro’s cit.#5, 2001 states, people will pay into a new system but also it’s “assumed future increases in contribution rates that would fully finance the benefits of present law,”echoed in Actuary Report [14 p.29] That’s paying both sides of the benefit, you pay into a Individual Plan (IP) for yourself and pay toward maintenance of the current system. #5 further states Social Security benefits are not fully adequate for making comparisons with private-sector plans, since many features of Social Security benefits are not typically available in private-sector plans then concludes scaled pattern results in slightly higher internal real rates of return under the OASDI program, and slightly lower accumulations for individual accounts.”

Current tax is 12.4%[31] and it’s recommended there be a raise in SS tax by 1.1%. Let’s assume that it will be split equally between SS and the new IP. You start in the red by almost 60%; 50% gone to current/future liabilities which you cannot claim against due to your IP.

Your claim of 11.5% return in TX/FL is not in cit.#5. Where did this number come from? Pretending this as true, the returns don’t look attractive considering ½ of what you put in is gone to liabilities at a lower rate than at present, crashing SS even quicker. Remember, it’ll take 75 yrs for SS to be solvent. Pro’s cit #6 requires subscription, a headline is not a whole story.

Pro’s cit.#7, 2001 reflects what Martin Feildstein stated in the 1990s. Then the article moves into review of G.W Bush’s plan, in office at the time, hence the title “President’s Commission to Strengthen Social Security.”It’s assumes the IP would be similar to the Thrift Savings Plan that gov workers have with a RoR of 6.5%. But here’s the catch, SS OASDI would require additional revenues in perpetuity in order to pay scheduled Social Security benefits”With his plan, only 2% paid in goes to an IP, the rest to liabilities of the old SS. BTW, you cannot claim benefits from SS because of your IP. The math: pay $10 pr/wk in SS taxes, $2 for me at 6.5% interest, $8 for current/future liabilities at 2.5%. At the end of 30 yrs compounded my 2% grows to $11,725. The rest at $8 pr/wk for 30 yrs at 2.5% is $23,008. Your kids can inherit the funds if you die young, but there’ll be 0 to inherit should you live for a time after retirement. Also, depending in what state you live, inheritance can be taxed. The Fed does not tax below 5.4M. With cash flowing out of IPs, will it remain so? Or if after a time will the Feds decide not to allow the IP money to pass to family? They’ll have 75 yrs to futz with it.

Pro’s cit.#8, 1996 On personal accounts benefiting the poor with a greater return and increase savings, but it does not addresses how the current/future liabilities of SS will be funded during attrition into all IPs.

Pro:“The first part is that people are mishandling their money…”Just a reminder, you brought this up “Posted by: lannan13, No counter plans. Wednesday, May 04, 2016 @ 12:43:03 AM.You have a plan? It’s great! You can up your own tax deduction into the present Pay As You Go system for possible early retirement. How is this an IP? The current PAYG system is not paying for your retirement. It’s paying for those already or soon to be retired. And your public option has no details. How long will you phase out the current system with 9.6-15.7T in liabilities over 75 yrs [26]? You’ll do it in 10?

Pro’s cit #9, 1995. Chili isn’t the US. At the time of AFP implementation 1981, their ratio of workers to retirees was 9-1, the US 4-1. To offset transition costs the gov. sold off state owned enterprises (Socialist), the US has no such assets. The US can only issue Treasury Bonds increasing the national dept. Also, Chili incentivized workers to join with an 18% pay increase. Many employers failed in payments due to dual taxes for the old/new systems; underground employment resulting. By 1994 only 55% of the work force was a part of the plan; 22% of the remaining failed to make payments. Also, the AFP RoR has fluctuated greatly with economic ups and downs. Chili took over AFP in 82-4 through buy backs and lost money in 1995 [27].The funds are in for profit institutions which cut deeply into profits with admin fees. 70% of the work force only works 6 mo. of the yr resulting in uneven contribution rates. 25% will not have saved enough for retirement. In addition, there is no system of equity for women or low wage workers to bring them up to a minimum benefit. The system does not work [28].

Galveston cit.#10, 1998 is a commentary. The Galveston plan does not offer a guarantee to surviving spouse or dependent children if death should occur prior to retirement or an adjustment for inflation. Single and high earning individuals reap more than under the current SS system; mid and low earners collect less. Workers are assigned an individual account but have no choice on investment decisions. Wealth building at the top but not at the bottom [29, 30]

Pro’s cit.#11 op-ed:Pablo is a high paid economist, not typical. It also mirrors what I stated earlier.The biggest problem in Chile is that many workers don't contribute regularly to their pensions because they're unemployed or working off the books.” Pro’s cit #12 requires a subscription, moot. Pro’s cit.#13 1997, regarding the Chilean system, which does not work and leaves out large swaths of the population. Most of your citations are old, more recent material tells a different story [28].
















This round I shall go over my opponent's case first and then move on to my rebuttals.

My opponent states that Privatizing RIB would lead to a collapse due to stock market options. There are a few things wrong with this. One of them tend to be that my opponnent has painted the picture of the government would have no safe guards on this. If you look at every government program or new technology, the government is always there to place some sort of safeguard against it. For a key example here is we can see that FDR created the FDIC that would product up to a certain amount in banks [1]. The government would most likely do something of a similiar matter here where the government would require these institutes to create a war chest so they are able to withstand an economic downturn. Under this case, the business would be less inclined to take huge risks and are more likely to take safer ones. Following a recession and during one, investors tend to focus on low growth, low risk stocks. They also tend to look towards smaller businesses which is a huge contribution to why there's a huge growth rate amongst them [2]

Another key issue is my opponent is bringing up economic downturns being a huge issue and brings up the Farming Bubble, Dot com, and the Housing bubble. These may be generally bad, but if we tend to look at the recovery stages we can see that this isn't as bad as my opponent's wants us to believe as people will quickly regain any small amount of money they lost. We can see that after the Farming Bubble in the 80's that the US GDP had a 2.9% growth and 1.4% after Dotcom. We can see that overall the economy has huge growth rates after these recessions that truely makes up for any downturns and then some. The economy has also been expierencing fewer recessions and longer growth periods showing that much of this tends to almost be a non-issue. We also have to factor in how the increase in funds into the stocks would expand growth exponentially showing that a recession would be unlikely for a great period of time.

First I would like to address the 75 year solvency issue that my opponent has brought up. The source actually talks about several different alternatives and how it would work with said 75 year test. It actually reads,

" Because Social Security has been operating as a defined benefit plan for over 75 years, it would be impractical to convert it immediately into a pure individual account plan, and no proposal has been made to do so.[3]"

I have stated in my last round that it would be a gradual transition. Not the immidiate change over my opponent is talking about. My opponent also miscontrews the idea in transition. Everyone would still have their funds with the transition in process. The Social Security budget has been used for other things in the government as they reallocated funds to pay for other projects. The most recent one was in the recent spending bill passed at the end of the year. The government could easily reallocate the budget for transition.

Even if taxes for RIB needs to be raised, which is highly unlikely, it will be offset by the benefits coming from this plan since social security barely meets the Senior Citizen needs and Privatized RIB actually increases this substantially which would help Senior Citizens out and allow them to live more in comfort.

Contention 1: Social Security will crash

Most of Budget Goes Toward Defense, Social Security, and Major Health Programs

My opponnent agrees with this contention, but disagrees on the solution. The crisis brought up is simply that we cannot allow for Social Security RIB to become insolvent in the status quo as it would harm the average American. Without any type of alternative, this would create a massive issue for us as we would begin to see a decline in consumer spending as more Senior Citizens will have to move back into their children's home and we would return to an economic slump under this case. There are several other key issues that arise out of this, but the key objective is that there needs to be some sort of alternative given and the only way to do this is privatization. The government continuiously takes funds from Social Security and it would be easy to help use these funds instead of allocation for other projects, but to help in privatization. In 2015, it was reported that Social Security's Admin and benefits costs the US 24% of our national budget which is harming other programs we could be using it for or even simply using it to pay off our debts [4].

Contention 2: Privatization solves.

My opponent brings up the Housing crisis again, but that is a case where the market was not regulated and in many to most circumstances it is. Medical Licensing is determined by the AMA yet they are private and have the public's best interest. After the crisis, the government put through several measures like instiuting the Voulcker rule with Dodd-Frank and now's there's a push to re-instate Glass-Stegal.

Larger investments making things cheaper is a quite simple Trickle-down economics. With a large increase and imput that would be poored into the stock market, there would be a huge new amount of capital avialable. The owner's of these businesses where the stock is being bought would then see an increase in Equity which they could use to increase their assets either by purchasing of land, equipment, or any type of tangible assets. These long term assets would be able to give back to the economy through providing an increase in jobs for the building of these places and it's upkeep. This would create a great loop that would send our economy skyrocketing. Do to the ample amount of money aviable, people would be able to afford more goods which increases production and continues this loop. We would start to move towards full employment.

We can see that there's a great deal of stocks that do go and bring back a great return the S&P has one averaging at 7%, but this is assuming that only one stock is invested in [5]. My opponent simply assumes that a great deal of the stock holders will hang on to the stocks all day long. Many of the traders today have the option to have a Profit and Loss limit in order to prevent huge losses and maintain maximum growth. We have to emphasize the ability to be able to inherit your RIB if you die. This is something that, in the status quo, is done inadiquately as the SSA only will allow a lump payment of $225, which is nowhere near what the family would need to supliment for the lost income [6]. My opponent attacks the Chilean example due to a few differences, but we do have to see that this is it's application in process and we cannot simply discard it do to that point and that point alone. Though there were some key differences we do have to see that the Chilean system did it with a ratio higher than the US when they started off and the Chilean economy wasn't as effective as the US and it helped change the Chilean economy into a powerhouse in the South American Continent. I would continue, but I am out of characters, so unfortunately I'll have to end my round here and pass things off to my opponent.

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Debate Round No. 2


“Privatizing RIB ..collapse due to stock market options.” Not what I stated. I pointed to historical down turns where individuals took a loss; Individual Plans (IP) will have the same risks.

The government would most likely (safe guard) .. create a war chest.. to withstand an economic downturn.” Most likely? The gov has control over the market? I have yet to see any safe guards in plans presented by you; fallacy. These “institutes” will ensure against losses? How would a war chest be funded,what’s the cost to the consumer? The FDIC was insolvent in the 80’s.

"..bubbles..These recovery stages we can see that this isn't as bad as my opponent's wants us to believe.” Black Monday:Total -36.7%, S&L crisis: FSLIC (FDIC) insolvent, 124B in bailouts. Nasdaq composite -78%, 2008 crash: S&P 500 Index -37% for the yr. Seniors lost on ave. 20%. When losses are high 2.9%/1.4% growth does little to recoup losses. The money is gone. It takes yrs to get back to the pre-crash balance; no equity on losses are being built. Retirees or soon to retire were hard hit [32,33,34,35]. Example: I lost 22% of my 401K in 2008 (like others). Not until last yr did I return to the pre-2008 crash level; minus new contributions. That’s 7 yrs of recouping losses. Not a quick recovery or a small $s. At 19 you have not lived through all these ups and downs with repetitive recuperation periods. It’s a significant loss over a working lifetime; stop drinking the cool-aid, it isn’t a non-issue. SS RIB is a safety net for many; privatization will pull the rug out.

For 35 yrs the financial ind. has repeatedly gut our economy. It started with Garn-St. Germain Depository Institutions Act, partly responsible of the S&L crisis[47], 1989 &1993 exemption of swaps and derivatives from all regulation, (hidden in 401ks) and the lifting of Glass-Steagall, allowing for sub-prime lending and bailouts. It appears that the tax payer loose on one end and pay from the other. Privatizing SS in light of past events is far too risky[36,37].

I fully understand the transition period. If IPs were started this year 2016, all new to the workforce, would fall into IPs. All those who began working in 2015 would fall under the old SS system along with others previously working, which accounts for the 75yr transition. But, “Under the system as now constituted, each generation largely pays for the benefits of the preceding generation. Under an individual account system, each generation pays for its own benefits. During the transition from defined benefit to individual account, there will inevitably be a transition generation that must pay for both the preceding generation’s benefits and its own.”….. individual accounts places the burden of the Social Security liabilities of two generations on one. Like many federal liabilities, this one can be passed down to future generations through borrowing, but the sheer magnitude of the additional government debt that must be issued (10T), on top of an already rapidly growing national debt, has further complicated consideration of such proposals [14 p29].

See R1 & 2 regarding the structuring of transition and cost to the individual upon IP implementation. Allocate funds from SS for transition costs? Your objection to the gov’s hand in the cookie jar? Increase national debt?

If an IP plan is implimented, SS tax must be raised to support existing liabilities and to support IPs. The Bush plan stated only 2% of tax would be put into IPs. What senior citizen’s comfort could be had with a 2% contribution rate, along with economic swings, recoup lags, and increased tax. Don’t forget those IP admin fees; [14]; net loss.

1: SS Crash/Solvency

Gradually increase the retirement age to 68 by 2050. Change the benefit formula which will slow future benefit growth, specifically for those with high incomes. Increase the taxable max from $168,000 to $190,000. Recoup the 10% not presently paying into SS; some state and municipal workers. Tax reform: reduce loop holes. Use CPI as a measure for COLA and tax SS benefits for high income retirees [38 p.29,49,50-52, 39]. If these reforms are instituted SS will be again self perpetuating into the future.

“The gov continuously takes funds from SS and it would be easy to help use these funds instead of allocation for other projects, but to help in privatization.” If you raid SS to fund privatization where’s the money for liabilities? The government has to issue bonds to cover the debt, creating more debt. Using SS to pay off the national debt? More cool-aid economics.

2: Privatization solves/ Woes

“Housing crisis again, .. not regulated.Deregulation was the cause! (above par 4) Glass-Steagall re-instatement failed in 2010 & 2013-14[40, 41]; it’s just talking points in the Presidential campaign.

"Trickle-down economics” A.K.A voodoo econ, has gotten the middle class where it is today, in decline. What happens when large amounts of capital is available? The bubble: risky inv. were made and overvaluation of stocks resulted [4, 5]. It’s not likely significant assets will be purchased. Often when money is available stock buy backs result, that also inflates stock values and line the pockets of CEO’s; fall in markets are inevitable for correction[42,43].

Small businesses, the biggest employers [48], don’t issue stock, they are privately held. Big business does little in asset development in the US. It invests overseas where labor and building is cheaper. Our IP money will fly over the pond, not create jobs here [44].

“stock holders will hang on to the stocks all day long.”I haven’t assumed or alluded to such a thing. My contender has not addressed how the IPs will be structured. Who will have influence on options available? Will it be a centralized gov unit or a free for all for Financial Institutions to make profits in fees?

"Profit andLoss limit in order to prevent huge losses and maintain maximum growth” Most Americans’ experience with the stock market is through their 401Ks, not actual trading. The general population is not educated on how the stock market works; a liability when planning retirement [14,46]. Also, would P&L limit be an option in an IP? 401ks don’t have it.

”.. ability to be able to inherit your RIB if you die.”As stated before, inherit what! 2% over 30yrs =$11,725, if you’re paying for both sides; your IP and liabilities, as well as exposure to market swings & fees? Inheritance taxes?

$255 is a death benefit not supplemental income. Widows over 60 and minor kids get survivor’s benefits if they are income eligible [45].

The World Bank can’t determine the impact of the Chili’s AFP’s on the economy due to macro-economic policies put in place at the same time. 3% of AFPs goes to DI and survivor’s ins. Plus, the fund’s admin fee of 2.5% for ea. monthly contribution. Also, 3.5-4% fee for withdrawal of annuities. The fee burden is 25% of contributions. AFP consortia’s’ profits are 27%. The cost to the Chilean gov in outlays and maint. is 6%/GDP. Three of the AFPs “effectively make decisions over investment resources representing 50% of Chile’s GDP;” reducing the states’ ability to regulate its own economy. US Actuaries conclude a min of 4-5 % RoR is required over long term to meet retirement needs, but in actuality are 2-3%. 50% participating in AFP are not saving enough and will not be eligible for a min. pension; leaving them destitute. The so called booming Chilean economy is on who’s back [46,28].




















I conceded the debate.
Debate Round No. 3


Thank you lannan13 for an invigorating debate.
Debate Round No. 4
2 comments have been posted on this debate. Showing 1 through 2 records.
Posted by Peepette 2 years ago
Thanks for the votes.
Posted by ColeTrain 2 years ago
Wow, nice. Why'd you concede, if I may ask?
4 votes have been placed for this debate. Showing 1 through 4 records.
Vote Placed by dsjpk5 2 years ago
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Total points awarded:30 
Reasons for voting decision: Concession.
Vote Placed by ColeTrain 2 years ago
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Reasons for voting decision: Concession
Vote Placed by Ragnar 2 years ago
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Reasons for voting decision: Concession.
Vote Placed by Kirigaya-Kazuto 2 years ago
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Total points awarded:30 
Reasons for voting decision: Concession