It's stupid on several levels.
First, what you're suggesting is taking money out of the "grubby hands" of politicians and putting that money into the grubby hands of private industry whose only purpose is to make money. That is the only reason for their existence. That makes absolutely no sense whatsoever to me.
SS functions as a safety-net, not a money-making enterprise. We cannot afford to gamble the safety-net seniors MUST have on private industry.
How much would SS have lost during this chaos that is immediately in front of us if it had been invested in private industry today? .. and to suggest nothing would have been lost would be the language of a moron.
I am beginning to wonder if you have any knowledge at all about investing money, but believe me, my friend, I know you well enough to know that you are capable of understanding this.
We are not talking about investing all your money today when you plan on retiring tomorrow. Anyone who had started contributing into a retirement fund, 6.2% of their gross salary 50 years ago and did so religiously with every paycheck from that time on and who has worked most of that time at average wages would be sitting on a very hefty nest egg today. Also, they would not simply retire today and take every dime out of their retirement. They would spread it out in monthly payments for the rest of their lives. And to guarantee a life time of payments even if they were able to outlive their nest egg an annuity contract purchased sometime before retirement or at retirement would guarantee at least what the government offers them. The annuity contract could be a governmental requirement as well as the monthly distribution at retirement basically that is what happens now anyway.
Now, in reply to your first point, I sure as hell would prefer putting my money in the hands of money managers at Merrill Lynch rather than Teddy Kennedy's hands. But, in revamping the system, the government should develop a system where they would approve the funds (paid for by the funds themselves similar to how the FDIC works) and closely monitor the funds into which these investments could be made. If the fund doesn't meet the requirements of the government, it does not get or maintain approval for these retirement funds.
When Social Security was set up, it was a good thing, but it could have been set up better. Now is the time to begin to make it better. This can not be done over night as I said in an earlier post, but it can be done.
Immie
PS That 6.2% is the amount you pay today into FICA. The employer also pays 6.2% of your salary. The employers portion could very easily be used to set up a disability fund and a early death benefit fund.