How to Fix Social Security

[onlydarksets]

Originally Posted by GTripp0012

Is there any particular example where this statement has actually held water?

I don't know one way or another, but it just sounds incorrect.

Outside of privatization, sure - it happens everyday. People act irrationally or as short-term discounters, and it costs them more in the long run. Haven't you ever acted out of spite? If you were acting as economic theory would predict, you would not have acted that way in most cases.

In this case, it would depend on the implementation of privatization. If it's partial, it might work. If it's full privatization, I believe it assumes too much about the average population in America. Many people (especially in past generations, but also in this generation) simply do not take ownership of their retirement - that's completely irrational and short discounting. We can place the onus on them by fully privatizing, and then for those that fail say "well, we gave them the tools, even though we knew many would do nothing with them" or we can institute social policy to protect against it.

I'm not saying it won't work - I'm just saying economic theory makes assumptions. You can assume away friction in physics, but it doesn't mean it isn't there.