Max Sawicky wrote:
>
> The brunt of the privatization campaign
> will be on retirement. I suspect they will
> leave disability and survivors alone for
> the time being. The carve-out proposed
> by Bush and others typically is small
> enough to leave the full 'SDI' of OASDI
> alone. Naturally, once they break the
> back of the program with retirement,
> they will go after 'SDI'.
As more people opt into private accounts, the whole of the SS funds
will decrease in the long run, so they won't have to do much but say
the funds aren't there for DI. Austerity!
>
> My impression is that the disability
> component is the best, in the sense of
> most economical, part of Soc Sec.,
> compared to the cost of private insurance.
> It would be worth it for someone (hint)
> to do a little comparison shopping and
> do a piece explaining the relative cost
> of buying disability insurance privately
> and individually vs. thru Soc Sec., even
> for healthy people. Naturally, the cost
> of DI for older, less healthy people is
> probably prohibitive, and for the disabled
> it's probably astronomical.
Yes, I've just made this point in a commentary -- it would be a good idea to get the actual figures. A worker's FICA tax buys not only retirement benefits but disability benefits and survivor's benefits if the worker dies leaving dependents.
The comparisons of private investment to Social Security leave these other benefits out of the equation. While we might do better investing our FICA tax privately so far as age-65 retirement is concerned, when we factor in disability and survivor coverage, there is nothing in the private market for anyone -- at any age, any level of health -- to get the level of income protection they get from Social Security for what they pay in FICA.
Marta