Future retirees may lose their financial security if major changes are not made soon to America’s outdated Social Security system.
Current estimates show that in less than fifteen years, Social Security will no longer collect enough in taxes to pay the benefits promised to elderly recipients.
That’s why Michigan should follow a new trail blazed by Oregon, which last year passed a resolution requesting that Congress allow the state to enact its own private alternative to the federal Social Security system.
Privatizing Social Security—allowing individuals and not government to choose retirement investments—is not a new idea. Countries including Chile have successfully privatized their public pension plans.
Workers in Chile now enjoy on average a 13 percent annual rate of return on their privatized pensions, compared to Social Security’s meager 2.2 percent—lower than many passbook savings accounts. Chileans can be sure their nest eggs will be there when they retire.
Let Michigan join Oregon and seven other states who have introduced resolutions telling Washington that what is good enough for Chileans is good enough for Americans. Our retirement security is too important to trust to an impersonal and failing federal system.
For the Mackinac Center, this is Catherine Martin.
The Mackinac Center for Public Policy is a nonprofit research and educational institute that advances the principles of free markets and limited government. Through our research and education programs, we challenge government overreach and advocate for a free-market approach to public policy that frees people to realize their potential and dreams.
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