Why is privatizing social security in the USA a bad thing - Essay Example

? Why is privatizing social security in the USA a bad thing? The principles on which governmental decisions in each country are based are usually related to the local ethics and culture, so that the risks for potentials oppositions are minimized (Ritzer and Atalay 2010). However, in many cases governors ignore the cultural and social characteristics of local population and focus on the economic aspects of each policy (Ritzer and Atalay 2010). This means that the needs and the cultural background of society are often ignored if specific economic benefits are set as priorities by the government of the country involved. Such problem has appeared in regard to the social security in USA. The privatization of social security in the above country has been highly promoted using the following argument: that such initiative would result to the increase of the effectiveness of the social security framework, an argument though that it is not verified in practice, as analyzed further below. Different approaches have been used in order to explain the inappropriateness of the privatization of social security in US. According to Ritzer and Atalay, the privatization of social security in US has been supported by various organizations and individuals but the completion of the relevant task has been proved quite challenging because it ‘is politically controversial’ (Ritzer and Atalay 130). This means that most politicians in USA cannot agree whether the privatization of social security in US would benefit citizens or not (Ritzer and Atalay 130). The extensive oppositions in regard to the appropriateness of the particular plan lead to concerns in regard to the feasibility of the plan and its actual effects on people across US (Ritzer and Atalay 130). Moreover, the privatization of social security in US is primarily promoted by international organizations, such as the World Bank and the IMF (Ritzer and Atalay 130); However, the decisions of these organizations are developed using similar criteria for all countries, a practice that has been highly criticized worldwide (Ritzer and Atalay 130). This practice can set national interests in risk, especially if a policy promoted by these organizations has not been adequately checked in real terms as of its appropriateness in similar social and economic conditions (Ritzer and Atalay 130). For example, the only regions where the social security system is fully privatized are the following two: ‘the countries of Latin America and the former Soviet Union countries’ (Ritzer and Atalay 130). Before suggesting the implementation of such plan in US, it would be necessary to check the potentials of the local economic and social framework whether it could support such plan or not. From a similar point of view, Binstock and George (2010) explain that the privatization of social security in US is quite difficult to be fully completed, especially since the terms under which the ‘Funded Defined Contribution (FDC) Accounts’ (Binstock and George 284) are not quite clear, a fact that would set in risk the relevant funds. These accounts have been used as a means for promoting the privatization of social security in US but they have been related to the following problems: a) ‘the swift to private accounts in USA’ (Binstock and George 291) has been quite rapid, with no adequate time for organizing appropriately the transition to a new social security system (Binstock and George 284). In this way, there can be no guarantee that the new security system in US will be effective and secure (Binstock and George 284); b) the use of Private Accounts as tools for promoting the privatization of social security is not common (Binstock and George 284). Concerns have been developed whether such Accounts would be effective for the social security of US, even if the relevant efforts would involve in the partial privatization of the country’s social security system (Binstock and George 284); c) the privatization of a social security system leads, necessarily, to ‘the transfer of significant powers from the state to private organizations’ (Harrington and Estes 139); US would have to face a similar problem if its social security system would be privatized, at least fully; d) the privatization of a social security system leads to another phenomenon: an important part of the population, especially ‘those who are less advantaged in terms of their educational and financial status’ (Harrington and Estes 139) cannot have any expectation for the improvement of their life ‘at old age’ (Harrington and Estes 139). Indeed, in the context of a fully privatized social security system, only those who can afford high contributions can expect that the level of their pension will be satisfactory (Harrington and Estes 139). Orenstein (18) also agrees that a social security system that it is fully privatized can be characterized as unfair for ‘poor and middle income people’ (Orenstein 18); e) The monitoring of a Private Account used in a privatized social security system can be quite difficult (Boyes and Melvin 709). In this way, failures or corruption practices related to the management of the particular Account cannot be easily identified, at least during their early phases (Sidlow and Henschen 2008). The damages on elderly or patients who rely on these funds for covering critical life needs can be extensive. It is made clear that the privatization of the social security system of US would be avoided, at least in the short future. The research developed in this field has proved that the implications of the full privatization of a country’s social security system can be many; for US a similar assumption can be developed. In regard specifically to US the implementation of such plan would require the resolution of a series of problems, such as: a) the terms under which the transfer of powers from the state to private organizations in regard to the country’s social security framework would be aligned with the country’s ethical and legal rules, b) the potentials of the system to cover the needs of people at different social and economic status would be also reviewed and c) the effects of the system’s failures would be checked; reference is made not only on the national economy but mainly on the society, the continuity of which would be severely threatened if an inappropriate plan of social security privatization would be implemented across the country. (words 1029) Works Cited Binstock, Robert and George, Linda. Handbook of Aging and the Social Sciences. 7th ed. London: Academic Press, 2010. Boyes, William and Melvin, Michael. Economics. 8th ed. Belmont: Cengage Learning, 2010. Harrington, Charlene and Estes, Carroll. Health Policy: Crisis and Reform in the U.S. Health Care Delivery System: Crisis and Reform in the U.S. Health Care Delivery System. 5th ed. Sudbury: Jones & Bartlett Publishers, 2009. Orenstein, Mitchell. Privatizing Pensions: The Transnational Campaign for Social Security Reform. New Jersey: Princeton University Press, 2010. Ritzer, George and Atalay, Zeynep. Readings in Globalization: Key Concepts and Major Debates. Hoboken: John Wiley & Sons, 2010. Sidlow, Edward and Henschen, Beth. America at Odds. 6th ed. Belmont: Cengage Learning, 2008. Read More