Administration's Advisory Council on Social Security, exactly 50% of the retirement fund would be "replaced with mandatory personal security accounts", which would be invested in stocks or bonds (McNamee). The other 50% would finance basic government benefits for all retirees. The privatization of accounts could theoretically reduce the length of time before the trusts go insolvent by substituting savings accounts for some part of Social Security's PAYG system. This would ensure that the government would have a surplus of funds for entitlement expenditures. By 2020, PSAs could hold assets worth around $6.0 trillion dollars if put on the market within a few years. "Such a huge balance [just for benefits] would give a kick to the nation's capital stock and [spur] growth" (McNamee). But the Advisory Council and others have come up with this plan not to balance the economy, just fix Social Security. The Council and Social Security Trustees have concluded that if nothing else is done to reserve funds for the upcoming insurgence of retirees, Social Security will exhaust the trusts by 2029, and PAYG "taxes will cover only 75% of promised benefits". To ensure solvency for another 75 years Congress would have to choose now to privatize, raise "the 12.4% payroll tax, cut benefits", or all three (McNamee). The limitations of privatization also come into play when considering the best reform platform. Questions arise as to how the government could do this without taking over the market and the consequences if there were a crash. Putting SS funds into the stock market for higher returns is agreed to be a very likely idea, but would individuals be willing to obey a compulsory law requiring letting the government manage funds on the stick market? There is also no true way to insulate investment planning from political pressures. If the market fell, the funds invested would go down also, and if they succeeded too well the stocks would raise interest ra...
