Political Science

From an economist point of view, the plan to privatize the Social Security System is a rational move towards the eradication of red tapes in the system. Here are some of the obvious benefits of privatizing the Social Security System 1) increase efficiency and effectiveness in delivering services to consumers, 2) less government intervention, 3) restructuring of old options (unnecessary or contradictory options), and 4) rational allocation of budget (Garcia, 2004). Individuals who plan to invest in a privatized Social Security System usually demand rational restructuring of the system to achieve efficiency and effectiveness in delivering required services to consumers. There is an expected lay-off of unproductive employees, standardization of work procedures, and increased allocation for consumer services.

The government is forced to adopt a minimalist approach in creating regulations for the system, as investors are less willing to invest in a heavily regulated industry (Garcia, 2004). To reduce unnecessary costs, the investors usually demand the removal of old or contradictory options. Hence, there is an expected rationalization of budget allocation.

The main problem with the privatization process is that a privatized Social Security System is non-guaranteed. There are no safety nets to safeguard investment. Indeed, if the Social Security System is publicly owned, the government can issue payment notes (guaranteed) in cases of unmerited budget deficits. The government can just pay the full amount in safe regular intervals.