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I may have an answer to one of the big arguements against privitization - the risk factor.

What if instead of putting the entire payroll tax into the IOU pool known as the Social Security Trust fund we had to put it in something risk reduced. Something like a CD or a Money Market style IRA that you can't access until you're 65 - much like an IRA works today.

Granted, putting it in this kind of vehicle foregoes the potentially higher returns of the equity market but it significantly reduces the risk variable. It even has a bonus - increasing measurable savings which is at or near negative terms these days.

Moreover though - it turns the system into exactly the way it is often promoted. I remember vividly a rep from the SS administration giving my 4th grade class a presentation on the system. He showed us this diagram of part of a paycheck going into a bank vault that would be there for when we retire.

Of course it isn't really like that as I found out as an adult. However, its not really a Social program in a true sense either. After all, benefits are paid based on what you put into the system while you were working as the SS has decided to proclaim in all those 'interesting' statements we got this year. (assuming you paid into the system of course)

In the end though its neither. The simple fact is that the trust fund is largely a pile of government bonds and pretty much all the cash being paid in is being paid out to today's retirees - never mind what will happen in the next 20 years.

Bottom line - I'll gladly take the money any which way I can. I have absolutely no faith that they mystical bank vault they showed me in 4th grade will exist by my retirement age. If sacrificing a higher return means I can keep it in a place where I can actually see it - well that sounds like a good idea to me.
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