In his State of the Union address, Bill Clinton issued a demand to Congress: Do not spend this year's projected tax surplus until social security is "fixed." Clinton's remark contains both good news and bad news. The good news is that we finally have a budgetary surplus after all of the campaign promises over the last ten years. The bad news is that social security is broken.
This news is particularly bad for college students. As college students turn out at the polls in the fewest numbers of any age group, policy makers have every reason to ignore their concerns. This means that when policy makers "fix" social security, it will be at the expense of college students. Therefore, any proposal by Congress or the president to "fix" social security ought to be closely examined by our generation.
Demographics already run against our generation.
Because our generation follows the baby boomers', we have a disproportionately larger tax burden than any generation that has preceded us. Ignoring this issue could cost college students a large sum in the future.
To "fix" social security, a number of reforms have been proposed. One proposal is to privatize the current system. This proposal may put the current recipients at risk by diverting revenues away from the current fund. Another proposal is to partially privatize the system. This proposal allows a portion of the current revenues to go into a private account for the contributing individual while the rest goes into the current fund. It is possible that this proposal can meet the current obligations of social security while remedying the unfair tax burden on our generation.
Seven countries have already privatized their public pension systems. Great Britain and Peru are the celebrated examples.
Whether or not the "fix" for social security includes full, partial, or no privatization, one thing is certain: if our generation does not turn out in larger numbers at the polls, we will be the ones who pay for whatever solution our parents' generation wants.
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