Social Security has long been America'smost popular government program. Yet it isa program badly in need of reform. In recentyears, reformers have proposed allowingyounger workers to take all or part of theirSocial Security taxes out of the Social Securitysystem and invest them privately in individualaccounts similar to IRAs or 401(k) plans. Whilethose proposals have been politically contentious,the American public appears to be wellahead of its elected representatives in acceptingboth the need for reform and the advantages ofindividual accounts.
A careful examination of public opinionpolling on this issue shows that a substantialmajority of the American public supports proposalsthat would allow them to invest a portionof their Social Security taxes through individualaccounts. That support has been consistent overtime and is seen in a broad range of public opinionsurveys. The handful of public opinion surveysshowing less support for individualaccounts are based largely on biased questions.
Support for individual accounts is based onAmericans should have control over their ownmoney and retirement -- rather than higherrates-of-return or higher benefits. As a result,support for individual accounts is less subject toerosion through outside events, such as fluctua-tionsin the stock market.
There is no correlation between support forindividual accounts and stock market performance.The growing support for individualaccounts in the late 1990s was not a result of thebull market. Recent declines in stock priceshave not significantly diminished support forindividual accounts.
Public confidence in the current SocialSecurity system has been steadily declining, inpart, perhaps, because as increasingly prosperousAmericans have access to alternativeinvestment vehicles, they are able to makeinformed comparisons with Social Security.
In the 2002 elections, pro-reform candidateswere victorious in every campaign in whichSocial Security was a major issue. An examinationof public opinion shows that the Americanpeople support Social Security reform, includingindividual accounts.