Originally Posted by cmac2012

SSI payments are kind of like a user fee, for using the accumulated capital improvements that we inherit from the previous generation. When I make big $$ remodeling a house, I'm leaning on the old farts in a nursing home who built the house to begin with. Private accounts sound nice, but as Krugman points out, investment fees take 20 to 30% of the money. And there will always be fools who can't figure the system out and I would rather see them squeak by on small SS payments than be begging on the street. Enough of that already.

The killer point in that piece was:

"The math of Bush-style privatization works only if you assume both that stocks are a much better investment than government bonds and that somebody out there in the private sector will nonetheless sell those private accounts lots of stocks while buying lots of government bonds."

"So privatizers are in effect asserting that politicians are smart - they know that stocks are a much better investment than bonds - while private investors are stupid, and will swap their valuable stocks for much less valuable government bonds. Isn't such an assertion very peculiar coming from people who claim to trust markets?"

I think Paul's right, there is no free lunch.