Argument: Fees on Soc Sec accounts diminish value of privatization
- Debate: Privatizing social security - con argument.
Greg Anrig and Bernard Wasow. "Twelve reasons why privatizing social security is a bad idea." The Century Foundation: "University of Chicago economist Austan Goolsbee has calculated that the costs of privately managed individual accounts are likely to reduce the ultimate retirement value of the accounts by 20 percent.13 He found that commissions, fees, and other costs would absorb nearly $1 trillion over seventy- five years—money that otherwise would go to beneficiaries. larger share of today’s workers would confront large benefit cuts than if no changes were made. Experience in the United Kingdom offers a warning about what the future could bring regarding management costs. Workers there have been allowed to open private accounts starting in 1988, since which time management fees and marketing costs among financial intermediaries have eaten up an average of 43 percent of the return on investment."