Sure, because you're positing that you would get solid, good returns on your investment. Which, being a Motley Fool user, you probably would have. It's a population self-selected for pretty solid financial literacy. So you end up with a really nice theoretical portfolio as the "privatization" side.

I chose generic index funds; there was no stock insight assumed.

The problem with this proposal is....what if you hadn't? What if you had lost all your money, instead of getting X times your money? If you hadn't saved it, if you didn't put it in an index fund, if you had put it all in WebVan or Pets.com stock or lottery tickets? You can say you'll forego all your future social security benefits, but then you're a destitute elderly person who still needs stuff. You still need housing, you still need food, you still need clothing.

Are you aware of the historical return rate for the S&P 500? It's between 10 and 10.5% over a period of 98 years. In a real sense it's between 7 and 7.5% when adjusted for inflation. Retirement time scales are around 40 years from initial investment to actually hanging up your one's spurs. The government could easily set up a basket of index funds with standard downside protection: Cap the max earning payout to X% at the price of guaranteeing losses.

The argument against a partial privatization of SS has always revolved around the Doomsday scenario of some investor parking all their retirement monies into Enron or Adelphia or something similar. That argument is flawed in 2 ways:

1. There are dozens of risk-based investing models to choose from.
2. The failure of a single company *still* doesn't diminish the overall rate of return story that the US stock market has delivered for over a century.
3. Nobody plans their retirement based on the performance of a single stock.

So, no. In the scenario where

-I'm allowed to invest my FICA tax monies that I pay in an investment vehicle pretax
-The government pockets my employer's matching funds

...it's about 6x better an outcome to have had even simple participation in the stock market over that timeframe.

The whole point of Social Security is that it's supposed to ensure that seniors have a certain minimum income in their elder years.

Who's disputing that? One would think that the underlying goal would be to hit the maximum rate of return so that retirement is, as a local radio commercial around here goes, "where every day feels like a Sunday instead of a Monday for the rest of your life".

Social Security when we look at it returns about 2.5% YOY on 2x the amount of money contributed. That's pathetic.

There was always a structural problem of a population that had never saved anything during their working years and as such SS is structured to be a transfer payment. That's why my proposal allows the government to keep 100% of what my employer(s) have contributed over the years on my behalf. For exactly those people.