Social Security Privatization Study Questions #1

1. What is the Social Security Trust Fund and how is it supposed to work?



2. What does Dean Baker say is the amount of debt that the Social Security Trust Fund holds compared to the amount of privately held government debt?



3. Besides the pessimistic assumptions about future economic growth, what does Baker suggest are some other possibilities that are excluded when considering the future peril of the Social Security Trust Fund?



4. How does Dean Baker say that the burden on workers contributing to Social Security should be accurately assessed?



5. How does Dean Baker counter the claim that Social Security taxes will cause an undue tax burden on workers in the future and lead to declining living standards?



6. How does Baker argue that privatization would actually decrease savings?



7. Why does Baker say that expected returns of 7% on private accounts are unrealistic for the long-term future?



8. What does Baker suggest means-testing for high income retirees would provide an incentive for?



9. How did Al Gore respond to younger voters and what his incentives were for the Social Security program?



10. How does eorge Bush plan to pay for the transistion to the privatized system?


Extra Credit: What was President Clinton's plan for shoring up Social Security back in 2000, and why isn't it feasible today?