Official newspaper of The University of Texas at Austin

The Daily Texan

Official newspaper of The University of Texas at Austin

The Daily Texan

Official newspaper of The University of Texas at Austin

The Daily Texan

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October 4, 2022
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UT professor suggests reform for Social Security

Social Security is headed in a dangerous and burdensome direction for millennials, finance professor Lewis Spellman said in an op-ed published in December.

In Writing for Texas Enterprise, a site specializing in UT business news, Spellman explains how the government uses parts of Social Security funds for other purposes and then conceals the missing money. 

The flaws in the system are beginning to show because the money isn’t being replaced in time, and some funds are “now running negative cash flow,” Spellman said.


Fashion merchandising sophomore Pilar Pitalue works part-time at Anthropologie, where a percentage of her paycheck is set aside for Social Security. 

“As a college student that is trying to fit in a million things, as well as working to have spending money and pay off loans, it’s pretty frustrating knowing that this money that’s being taken away from me to have later may not be there,” Pitalue said.

Privatization of the Social Security system, where funds are invested in the private sector, such as the stock market, is the solution to getting out of the financial debt currently plaguing Social Security, Spellman said.

“It will take a lot of political will (to change the Social Security system),” Spellman said. “It’s up to the president and Congress to see it right and make those changes. If it’s ever going to happen, it would happen under Trump.”

Spellman said success seen in Latin-American countries, such as Chile, where payouts are “two to three times more” than what government bonds would have produced, points to the value of privatization.

International business junior Jessica Mullen said if a transition is made, the government should give citizens a choice between the old and new way.

“I think having a choice may be significant here in the U.S.,” Mullen said. “Not only because not everyone agrees that privatization is a viable solution, but also as a test run to determine whether it’s possible in our system.”

If the Social Security system continues its current practice, Spellman said the result is higher taxes, which would slow the growth of the economy. If fund investments are privatized, Spellman said Social Security wouldn’t be a politically divided issue. 

“To have a successful outcome of the invested monies in the private sector, (privatization) puts all parties having the same interest, which is a growing, prosperous economy,” Spellman said.

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UT professor suggests reform for Social Security