Why is there a desire on the right to get rid or privatize Social Security?

[Inverted Things]

It's the most fiscally sound part of the entire federal budget. It's the one part that Bush didn't destroy. Its existence is really hurting those anti-government activists, because it shows that the government is capable of doing something right if the right-wingers didn't get to destroy it.

Read the front page of your Social Security statement.  The warning is right there:

"...Without changes, by 2037 the Social Security Trust Fund will be exhausted and there will be enough money to pay only about 76 cents for each dollar..."

And it's worse than that:  in order to get to 2037, we have to go through 2016, when the Trust Fund will have start cashing its bonds.  The government does not have cash on hand, and so will have to resort to printing money (which would cause very noticeable inflation), raising taxes, or scaling back the program.  I remind you that 2016 is only about 5 years away.

And it's even worse than that:  Social Security looks positively sparkly when compared to Medicare, whose problems are about an order of magnitude worse.

Yeah, it's Medicare, and the military spending, and these tax cuts for the rich that need to be fixed now. Not Social Security.

No, it's Social Security too.  Here are the numbers I found from Kotlikoff's "The Coming Generational Storm" in 2005:  The total fiscal gap was measured at $66 trillion in 2005 dollars.  The unfunded portion of SS totaled around $10 trillion in 2005 dollars.  Bush's tax cuts were listed as having made the fiscal gap 15% larger.  Thus, Social Security and the tax cuts contribute about the same to the problem.  The prescription drug addition to Medicare was estimated in 2005 to add $6 trillion.

[Inverted Things]

How are publicly financed pensions welfare?

Because the money flows like this:

Taxpayer -------> Government ---------> Welfare recipient

There, I even drew you a picture.

It really is a matter of semantics.  You are receiving funds but you do pay into the system.

To respond to earlier post.
I'm doing good. Older as well.  Perhaps not as bitter as you It has been a few years- For some reason, I vaguely remember some connection with academia and I want to say in economic field.... Am I off base?

Yep... Ph.D. student in mathematics.  I'm walking away from it at the end of the year though.

The more correct way to view the system is like this:  The first to collect got their money from the first to pay.  The next to collect got their money from the next to pay.  Thus, kids paying their parents is basically what SS is doing.  However, their parents are leaving them a $100 trillion fiscal gap to deal with.  On that basis, can the kids really afford to support their parents?

[LBJ Revivalist]

Yak, right off base:

Do you support, or are you an advocate of Laisse-Faire economics? That is, a system wherein no welfare state of any kind exists.

[TheDeadFlagBlues]

I fail to see how receiving a SS check from the government automatically makes someone a "welfare recipient".

And I'm asking: how are they not welfare recipients?  What's the difference between a senior collecting SS and a TANF family collecting food stamps?

SS isn't means tested, TANF is. Everyone pays into SS in some fashion so that they can receive it at a later point in their lives. Social Security isn't a welfare program. Social Security is a social insurance program.

This might be semantics but it's important semantics considering that many politicians have already been calling Social Security a "ponzi scheme" or "welfare" and it poisons the well of the political debate surrounding it. Face it: welfare is a dirty word in this country and if you can demonize Social Security by calling it welfare, it makes the job of destroying it or significantly "reforming" it easier so that way it really isn't a public pension system anymore.

[LBJ Revivalist]

I fail to see how receiving a SS check from the government automatically makes someone a "welfare recipient".

And I'm asking: how are they not welfare recipients?  What's the difference between a senior collecting SS and a TANF family collecting food stamps?

SS isn't means tested, TANF is. Everyone pays into SS in some fashion so that they can receive it at a later point in their lives. Social Security isn't a welfare program. Social Security is a social insurance program.

This might be semantics but it's important semantics considering that many politicians have already been calling Social Security a "ponzi scheme" or "welfare" and it poisons the well of the political debate surrounding it. Face it: welfare is a dirty word in this country and if you can demonize Social Security by calling it welfare, it makes the job of destroying it or significantly "reforming" it easier so that way it really isn't a public pension system anymore.

SS is something that should be fought for, and saved. If the Democratic Party caves and craps out on this, then the Democratic Party should crumble into bits.

[Mr. Morden]

Therefore, a better measure of government solvency is to look at future liabilities, discounted back to present value.  Kotlikoff, using the CBO's numbers, comes up with a total US debt of $100-$200 trillion.  That's over $500,000 for every man, woman and child in this country.

How are you counting future liabilities with respect to entitlement programs?  Are you talking about the expected cost of Social Security and Medicare for everyone who's currently in the workforce?  Everyone who's currently alive?  Everyone who will ever be in the workforce in the future?  Because Social Security and Medicare last indefinitely, so unless they're repealed, you can calculate the liability for the programs arbitrarily out into the future, and come up with enormous numbers that don't really mean very much without context.

The key is the discounting to present value.  Social Security and Medicare were safe under this infinite-time metric as long as life expectancies were around 70 and families had 3 or more kids on average.  These demographic changes meant that the expected revenues from SS/Med taxes fell while expected expenses rose.  The $100 trillion measures the difference between expected future revenues (calculated simply as something like 23% of GDP) and expected future expenses (which have to take demographics into account to get the numbers for SS/Med).

I'm not sure that really gets at my point.  When you say "expected future revenues" and "expected future expenses", over what time frame are you doing the calculation?  You can't really be calculating over an infinite time frame, because over an infinite time frame the revenues and expenses are both infinity, no?

[seanobr]

Perhaps you'd care to point out where I said that all welfare is bad?  Most seniors are not poor, and in fact the poverty rate among seniors is low compared to the poverty rate of children, teenagers, and young adults.

I question the ethics of taking money from the latter groups to give to seniors, who are already more well-off than many of the folks supporting them.  You have similar views on things we might call corporate welfare, right?  And the fact is that Social Security is unsustainable in its current form.

As my support for Social Security is predicated on the fact that it is the most effective poverty-reduction program ever implemented by our government, I feel compelled to challenge this assertion since it's so contrary to everything I have read on the topic.  According to The Century Foundation, 40 percent of our country's elderly population were kept out of poverty because of Social Security in 1999; another 10 percent were in poverty despite their benefits, and I believe those two statistics have remained constant since.  Eliminating or significantly reducing the program could thrust anywhere from 10 to 15 million people beneath the poverty line, to say nothing of those who would have their retirements impacted by an amelioration in supplementary income.  It's simply not possible that all of these people could re-enter the labor force to finance their retirement as it is ongoing, and we will never turn a substantial decrease of Social Security into legislation a majority of politicians could coalesce behind.  

In 2003, 35 percent of people on Social Security relied on it for 90 percent or more of their income; if we can reduce that statistic by half or more, then we may have cause to explore -- delicately -- how to transform the program.  Until then, one in three recipients are retiring on the strength of their benefits, and the government will not betray the lifetime of trust many of these people have placed in the system by depriving them of it and undoing the decline in elderly poverty that Social Security has enabled.  I have no reason to doubt your economic assessment of the situation, but this as much a political issue as a fiscal one, and the government will do whatever is needed to meet its Social Security obligations, probably culminating in a significant tax increase some time before 2037.

You are correct in noting that there is the prospect of an accumulating shortfall even if we presume that the government will manage to fill the chasm left by its mismanagement of the trust fund.  I'm far from a supporter of his, but I'm inclined to agree with Robert Reich's argument that the question is resolvable with a few adjustments.  The Urban Institute wrote an excellent summation on the subject earlier this year; ultimately some combination of an increase in the retirement age (68 or 70, to better coincide with today's longer lifespan), raising the tax rate by a percentage point to 13, and an examination of the Cost Of Living Adjustment will have to be undertaken, at minimum.  

I am assuming, of course, that we are dedicated to preserving the program as is, because I think the events of two years ago have rendered the privatization movement stillborn for a significant time.  The Democratic Party will never accede to that, and my own will not desecrate Social Security alone.

And it's even worse than that:  Social Security looks positively sparkly when compared to Medicare, whose problems are about an order of magnitude worse.

Much of the Republican hysteria over President Obama's health care reform plan was that it was placing us on the path to a single player system; I'm of the opinion that the seemingly inevitable unraveling of Medicare will force us to implement European-style health care, to say nothing of the average 9.6 percent insurance premium increase that has taken place over the past two years.

[Inverted Things]

Yak, right off base:

Do you support, or are you an advocate of Laisse-Faire economics? That is, a system wherein no welfare state of any kind exists.

No.

[memphis]

Because they hate it, obviously. They have ever since it was passed.

[Inverted Things]

SS isn't means tested, TANF is. Everyone pays into SS in some fashion so that they can receive it at a later point in their lives. Social Security isn't a welfare program. Social Security is a social insurance program.

You're playing word games.  TANF is also a social insurance program

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And this is a good feature of calling it welfare, because SS needs to be reformed by quite a lot.  From Kotlikoff again (bearing in mind his numbers were from 2005, and the situation is a lot worse now):

To make SS and Medicare solvent, here are some options:
1) Increase federal income taxes by 74%
2) Increase payroll taxes by 103%
3) Cut federal purchase by 115% (impossible)
4) Cut SS and Medicare by 47%

You can do some mixing and matching here, but the message is clear: SS and Medicare are going to hurt us.  Really, the fact that I'm calling it welfare is totally irrelevant to the point I'm making.

[Inverted Things]

Therefore, a better measure of government solvency is to look at future liabilities, discounted back to present value.  Kotlikoff, using the CBO's numbers, comes up with a total US debt of $100-$200 trillion.  That's over $500,000 for every man, woman and child in this country.

How are you counting future liabilities with respect to entitlement programs?  Are you talking about the expected cost of Social Security and Medicare for everyone who's currently in the workforce?  Everyone who's currently alive?  Everyone who will ever be in the workforce in the future?  Because Social Security and Medicare last indefinitely, so unless they're repealed, you can calculate the liability for the programs arbitrarily out into the future, and come up with enormous numbers that don't really mean very much without context.

The key is the discounting to present value.  Social Security and Medicare were safe under this infinite-time metric as long as life expectancies were around 70 and families had 3 or more kids on average.  These demographic changes meant that the expected revenues from SS/Med taxes fell while expected expenses rose.  The $100 trillion measures the difference between expected future revenues (calculated simply as something like 23% of GDP) and expected future expenses (which have to take demographics into account to get the numbers for SS/Med).

I'm not sure that really gets at my point.  When you say "expected future revenues" and "expected future expenses", over what time frame are you doing the calculation?  You can't really be calculating over an infinite time frame, because over an infinite time frame the revenues and expenses are both infinity, no?

Sure, but discounting to present value leaves a convergent geometric series.  Think of it this way: if you have to raise $3 trillion in today's dollars by year 2500, it's easy to do as opposed to raising $3 trillion in today's dollars by 2012.  You get to take advantage of compound interest, and you have a lot of time to do it, so it contributes very little to the fiscal gap.  So, to answer your question: The fiscal gap does look at all future liabilities.  For practical purposes, looking 150 years out gives you about the same number provided nothing ridiculous happens (like gov't passing a law entitling everyone to $1 googol dollars in year 2300... that would broaden the fiscal gap considerably).

[Inverted Things]

Perhaps you'd care to point out where I said that all welfare is bad?  Most seniors are not poor, and in fact the poverty rate among seniors is low compared to the poverty rate of children, teenagers, and young adults.

I question the ethics of taking money from the latter groups to give to seniors, who are already more well-off than many of the folks supporting them.  You have similar views on things we might call corporate welfare, right?  And the fact is that Social Security is unsustainable in its current form.

As my support for Social Security is predicated on the fact that it is the most effective poverty-reduction program ever implemented by our government, I feel compelled to challenge this assertion since it's so contrary to everything I have read on the topic.  According to The Century Foundation, 40 percent of our country's elderly population were kept out of poverty because of Social Security in 1999; another 10 percent were in poverty despite their benefits, and I believe those two statistics have remained constant since.  Eliminating or significantly reducing the program could thrust anywhere from 10 to 15 million people beneath the poverty line, to say nothing of those who would have their retirements impacted by an amelioration in supplementary income.  It's simply not possible that all of these people could re-enter the labor force to finance their retirement as it is ongoing, and we will never turn a substantial decrease of Social Security into legislation a majority of politicians could coalesce behind.  

Great!  We can cut benefits completely to 50% of the recipients without putting anyone into poverty.  Regarding seniors and the workforce: the new trend is to not retire from office jobs.  My dad, 72, works at his own business just as he has for the last 40 years.  These folks who don't retire are fleecing their kids twice: once on SS/Med, and once by staying at their job (which reduces the need for a company to grab new hires).

Look at the poverty rate for children in the country.  Look at the job prospects for recent college grads.  These are the folks who will foot the bill for SS/Med, and they're hurting.  Kotlikoff calls this "Fiscal child abuse," while former Treasury Secretary Paul O'Neill argued that we need to save our kids from the SS/Med system.

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To make SS/Med solvent assuming no reduction in benefits, payroll taxes would need to be raised over 100%.  Given that payroll taxes are 12.4% now, doubling that gets you close to 25%!  That's excessive.  Americans are generally pretty complacent, but this might compel them to grab some pitchforks.

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The tonics mentioned above won't help much, and someone had better desecrate SS.  Making SS solvent is going to be traumatic.  Waiting longer to do so makes it more traumatic.  Our politicians are collectively putting their head in the sand and ignoring the problem, because no one has the guts to face up to how bad the situation really is.

[Beet]

I fail to see how receiving a SS check from the government automatically makes someone a "welfare recipient".

And I'm asking: how are they not welfare recipients?  What's the difference between a senior collecting SS and a TANF family collecting food stamps?

SS isn't means tested, TANF is. Everyone pays into SS in some fashion so that they can receive it at a later point in their lives. Social Security isn't a welfare program. Social Security is a social insurance program.

This might be semantics but it's important semantics considering that many politicians have already been calling Social Security a "ponzi scheme" or "welfare" and it poisons the well of the political debate surrounding it. Face it: welfare is a dirty word in this country and if you can demonize Social Security by calling it welfare, it makes the job of destroying it or significantly "reforming" it easier so that way it really isn't a public pension system anymore.

SS is something that should be fought for, and saved. If the Democratic Party caves and craps out on this, then the Democratic Party should crumble into bits.

I am all for fighting for and saving SS, which puts me on the opposite side of people like Kotlikoff. But at the same time, I wish progressives would see that it's a lot easier to defend a program that is in good fiscal shape than one that isn't. Even if SS isn't in deficit today, some plan should be implemented that will ensure that it continues to remain solvent in the future. I don't think this necessarily involves enacting drastic cuts today that take effect today. Rather, we have to be prepared for a number of different possible scenarios. The problem with the future is that it's inherently uncertain. In 1995, getting the government's budget into surplus by 2002 was seen as an unrealistic, best case scenario goal. In 2000, the CBO was calling for the entire national debt to be paid for by 2010. In 2006, Ireland was running a budget surplus, had for years, its economy was booming, and it had a multi billion euro reserve fund. On the opposite end of the spectrum is W.S. Jevons' 1866 prediction that Britain would be doomed because it would run out of coal. The Population Bomb is another example. In short, the future was and is highly uncertain. Forget uncertainty in future policy. Wars, economic calamities, markets, unexpected new technologies, will throw your plans off from year to year, maybe month to month.

This calls, IMO, for policies that are based on contingencies, and a comprehensive political as well as a policy response. The law must be written to be dynamic and be able to respond to either worse or better than expected outcomes, it must be able to reach into the future without necessarily changing the present (this is politically easier as well, especially if you're talking about cuts), and it must be supported by a functioning political system where both parties can - gasp - work together. The old saying 'give a man a fish, and you feed him for a day, teach a man to fish, and you feed him for a lifetime' is quaint, but apt for long term fiscal planning. More than any one law, the critical asset is a future political system, citizenry, and media that can respond to tomorrow's challenges dynamically and effectively.

[All Along The Watchtower]

Because Social Security works. A government program besides defense that works doesn't match their ideology.

[Southern Senator North Carolina Yankee]

I just love how liberals think they can just raise taxes and cut defense spending to solve the entitlement problem. The rate of growth in the entitlements will swamp everything else, defense will be a drop in the bucket comparatively. Ignorance is bliss I guess.


Its worse then those on the right who thing they can get away with no tax hikes or defense cuts. Atleast defense isn't growing the rate SS is and its fairly easy to cut back on the defense far more so then SS or Medicare if there is trouble.

[memphis]

I just love how liberals think they can just raise taxes and cut defense spending to solve the entitlement problem.

It may not solve all our budget woes, but the conservative answer to lower taxes and raise defense spending. Doesn't take a math genius to figure out which party needs to repeat the first grade.

[WillK]

When it comes to social security I really want three things: 1. A lock box so it's not constantly raided by congress  ...  3. An end to tax withholding and payroll tax so that the program is paid for out of general revenues and people actually know how much they're really being taxed. Do that and I won't have a problem with the program.

Arent 1 and 3 incompatible?  Seems to me that a "lock box" only really works if the revenue stream is separate from the general revenue. 

[WillK]

It's the most fiscally sound part of the entire federal budget. It's the one part that Bush didn't destroy. Its existence is really hurting those anti-government activists, because it shows that the government is capable of doing something right if the right-wingers didn't get to destroy it.

BINGO!  We have a winner!

[Southern Senator North Carolina Yankee]

I just love how liberals think they can just raise taxes and cut defense spending to solve the entitlement problem.

It may not solve all our budget woes, but the conservative answer to lower taxes and raise defense spending. Doesn't take a math genius to figure out which party needs to repeat the first grade.

Nice tactic.

Last time I checked, I said we needed a 10% cut in Defense as well as 15% to 25% cuts in Agri-subsidies and elimination of Corn ethenol subsidies, among other GOP pet projects. I also said we needed to raise taxes somewhat.

It is just as easy to write off the theory as illegimate and thus allow yourself the ability to label them as not understanding basic math, as it is to write off everything the other side proposes as illegitimate to propagate your claim of them being the "Party of No". It doesn't make the the hype anymore accurate.

Which party is it that wants to control out of control public pension costs? It isn't Democrats in the pocket of SEIU thugs.

Which party wants to ask tough questions abotu where money is going in education instead of funding massive growth in administration and then hiding behind the students when criticized? It isn't the Democrats in the pock of the Teacher's unions.

Which party wants to control out of control lawsuits bankrupting companies and driving costs through the roof, especially in Medical profession? It isn't the Democrats in the pocket of the trial lawyers.

Which party is that that has the guts to oppose a financial trading scheme that won't accomplish anything in the way of reducing emissions (Europe?) but will instead stunt growth and help make China number one? It isn't the Democrats in the pocket of the enviromentalism hijacked by nutcases and profiteers.

You guys hardly have any ground to claim we are fiscally irresponsible when you consider who you guys go to bed with on a regular basis.

During and after the HRC debate, all we heard was how the CBO was the most accurate, the absolute best, and never been wrong about the cost of anything (lol), analysts out there. In 25 to 30 years, Four items will take up the entire budget. Is it defense? No. Is it Agriculture subsidies? No. They are Social Security, Medicaid, Medicare and Interest. Can we eliminate all of Defense? Just let China roll in and clean up the mess when they get tired of funing our entitlements?  Education would have to go to 0, Defense 0, school lunches 0, Infrastructure 0, and even enforcement of Civil Rights, yep, 0. In 2070, the models literally collapse. With a deficit eventually reaching 1/4 of the size of the entire economy and the debt several times the size of the economy. And whatever you think of Paul Ryan, he is right when he said "You won't get there". Long before that time arrives we would have to have come to terms with reality. Including potentially cancelling these programs, you claim to love so dearly, entirely. It is time for a reality check on these damn programs, before it is too late. If you want to save them, they have to be reformed, NOW.

It dwarths any reasonable savings from defense cuts, tax hikes, or cuts elsewhere. With 10% unemployment, how much do you really want to raise fica taxes? The retirement age will have to rise, benefits will have to be slashed through means testing and yes fica taxes will have to go up. If you are determined to pretend its still 1935 and keep the age where they and not change the structure of the program and limit the solutions to raising taxes, you are denying current economic reality and the reality for the next few years. Its time for the left to practice what it preaches the right should do, and accept some damn compromise.

[angus]

I've seen people on the right treat as if it's handout, welfare, etc, and want to either see it phased out in a sneaky way, outrightly disbanded, or privatized. Why?

whoa, hoss.  You just asked several questions.

The answer to all three probably lies in the fact that it's huge.  Nearly 600 billion dollars.  600 billion.  That's a really, really big number.  If you had 600 billion beer nuts you could cover the state of Texas in beer nuts.  Twice.  Or, if you had 600 billion inches of twine you could wrap that twine about the earth.  376 times.  Well, you get the picture.  On a practical level, 600 billion dollars represents 20% of the federal government's outlay.  It's pretty much like Defense.  600 billion dollars worth of collective debt, cancelled, becomes 600 billion dollars worth of relief.  If you could get rid of just those two little things, SS and Defense, then you'd be set.  We'd start paying down our debt.  Make the DoD and SS disappear, and within 6.93 years, we'd be Back in Black.

Of course, we need a standing Army and Navy.  Unless you're a Libertarian you must agree with that.  And, of course, there are some who haven't made wise decisions with respect to their retirement portfolios, so unless you're a Libertarian you must also agree that we need some sort of safety net regarding retirement.  Therein lies the rub, yes?  How much you rub it really depends upon just how hard you want to make it.

Now, there's also the separate issue of privatization.  That's a completely different question.  We'll get to that later once you have absorbed the initial reasons for concern over the ballooning federal deficit.  And once you have acknowledged that privatization and banishment are two completely different suggestions.

[Southern Senator North Carolina Yankee]

I've seen people on the right treat as if it's handout, welfare, etc, and want to either see it phased out in a sneaky way, outrightly disbanded, or privatized. Why?

whoa, hoss.  You just asked several questions.

The answer to all three probably lies in the fact that it's huge.  Nearly 600 billion dollars.  600 billion.  That's a really, really big number.  If you had 600 billion beer nuts you could cover the state of Texas in beer nuts.  Twice.  Or, if you had 600 billion inches of twine you could wrap that twine about the earth.  376 times.  Well, you get the picture.  On a practical level, 600 billion dollars represents 20% of the federal government's outlay.  It's pretty much like Defense.  600 billion dollars worth of collective debt, cancelled, becomes 600 billion dollars worth of relief.  If you could get rid of just those two little things, SS and Defense, then you'd be set.  We'd start paying down our debt.  Make the DoD and SS disappear, and within 6.93 years, we'd be Back in Black.

Of course, we need a standing Army and Navy.  Unless you're a Libertarian you must agree with that.  And, of course, there are some who haven't made wise decisions with respect to their retirement portfolios, so unless you're a Libertarian you must also agree that we need some sort of safety net regarding retirement.  Therein lies the rub, yes?  How much you rub it really depends upon just how hard you want to make it.

Now, there's also the separate issue of privatization.  That's a completely different question.  We'll get to that later once you have absorbed the initial reasons for concern over the ballooning federal deficit.  And once you have acknowledged that privatization and banishment are two completely different suggestions.

I definately got to hand it to you. You certainly know how to explain stuff in a creative fashion.

[Brandon H]

Because we would rather keep more of our money and choose to make our own decisions regarding saving for retirement. And the current system cannot sustain itself. Even supports of it will admit that.

(How did defense spending come into the conversation?)

[Beet]

Social Security is supposed to be just that. If you privatize it and invest it all in mortgage backed securities, it just becomes another public private frankenstein. I'd rather see the program eliminated entirely and saving for retirement be returned wholly to personal responsibility than some sort of fannie mae style ponzi scheme for retirement where the government takes your money and forces you to invest it in wall street.

[Southern Senator North Carolina Yankee]

Social Security is supposed to be just that. If you privatize it and invest it all in mortgage backed securities, it just becomes another public private frankenstein. I'd rather see the program eliminated entirely and saving for retirement be returned wholly to personal responsibility than some sort of fannie mae style ponzi scheme for retirement where the government takes your money and forces you to invest it in wall street.

What is the SS trust fund in currently? Is is not public treasuries?


Are these not traded on Wall Street?


Social Security already is on Wall Street. The only thing we are debating is the rate of return and safety of the investment.

Didn't Andy Stearn come out with a proposal to basically shift the trust fund into a diverse number of publically traded securities including stocks? And then you would have no control at all, whereas the Republican proposal would allow people to stick with T bills if they so choose. 

[Beet]

Social Security is supposed to be just that. If you privatize it and invest it all in mortgage backed securities, it just becomes another public private frankenstein. I'd rather see the program eliminated entirely and saving for retirement be returned wholly to personal responsibility than some sort of fannie mae style ponzi scheme for retirement where the government takes your money and forces you to invest it in wall street.

What is the SS trust fund in currently? Is is not public treasuries?

Are these not traded on Wall Street?

Social Security already is on Wall Street. The only thing we are debating is the rate of return and safety of the investment.

Didn't Andy Stearn come out with a proposal to basically shift the trust fund into a diverse number of publically traded securities including stocks? And then you would have no control at all, whereas the Republican proposal would allow people to stick with T bills if they so choose. 

Having it in public treasuries is not the same thing as having it in mortgage backed securities. Even so, the treasury market is too big already. I've already said that legislation must be enacted to ensure that Social Security remains solvent as a standalone program. The US should also make it a long term goal to pay off the national debt and keep the treasury market only as a liquidity device.

Any proposal to invest retirement money in Wall Street securities is a sham. The whole point of Social security is to provide social security, not just to have a government-mandated retirement fund for its own sake. We already have 401ks. Changing it into another behemoth whose success is dependent directly on capitalism achieves the opposite result as it was originally intended and if that is the case it might as well be scrapped.