There is a divergent opinion among the leading scholars of both the globe and the United States of America whether the process of Social Security privatization is being dictated by moral grounds rather than by economic ones (Gillon, 2008). The main argument is that the privatization is not justified when the economic benefits are visible and tangible while the moral aspect still remains a precarious issue (Baker, Weisbrot, 1999). Generally, various arguments are raised by both the supporters and the opponents of this prospective policy of the United States of America. This essay focuses on the potential negative and positive aspects of the economic situation in the United States if this initiative someday comes into a law.
The main argument of the adherents of the privatization theory is that if Social Security system is privatized, the requirements of the moral criterion are better satisfied automatically (Koitz, 2001). This theory is opposed to the currently employed mechanism of pay-as-you-go payment procedure. Naturally, if this system is privatized, the citizens of the United States of America are almost automatically granted with broader opportunities to manage their lifestyles, greater extent of security is provided and most importantly the financial future becomes a subject of one’s own discretion (Gillon, 2008). Another positive element is that the animosity and ever-growing misunderstandings between the generations may be removed. The policy of community, mutual rapport and understating will be promoted if the law legalizing the privatization of the social security is adopted in the forthcoming future. Besides, a very persuasive argument for the promotion of this policy is that the one will undoubtedly benefit in terms of classical liberal values and the potentially available option to manage one’s own affairs at one’s personal discretion.
However, the economic aspects of the prospective law are highly disputed in the community (Baker, Weisbrot, 1999). The primary concern is whether this privatization is indeed aimed at boosting the savings of American citizens and what is the value of the transformation of this system. The leading economists and social figures of the United States today vigorously advocate the argument that the transition to the privatization is completely unjustified from the purely financial point of view. The recent economic crisis dictates that each dollar shall be accounted with particular scrutiny and attention. Besides, the opponents of the Social Security privatization support the idea that the current system protects the savings of the United States citizens from inflation due to the fact that it is permanently indexed (Gillon, 2008). Moreover, they are strongly opined that if financial calamity like the Great Depression ever takes place, the loss of the individual savings will end in a fatal tragedy for the majority of the American families.
However, the dominating opinion among the scholars is that the necessity to legalize the privatization of social security is in its part majorly dictated by the constitutionally established moral pluralism. Whereas the majority of the citizens of the United States acknowledge the fact that personal freedoms and values are highly respected and appreciated, the values of the community in general such as fairness and security are undoubtedly of paramount importance for the entire community of the United States of America. When common values of the United States community are somehow, even hypothetically endangered, an average citizen of the United States of America rightfully assumes that his personal privileges and rights can be sacrificed. Therefore, the argument of the extra importance of personal freedom is heavily criticized by the opponents of the privatization despite the opinion that financial future of the individual must be determined by this individual himself is still dominating among the scholars and the general public(Koitz, 2001).
Overall, it is evident that both parties are heavily armed with substantial arguments. Now, it is the matter of the Congress of the United States of America to find out whose opinion is more substantiated.