Thursday, May 05, 2005

Private Accounts won't pay Disability

This is an interesting article from the Boston Globe. The money quote: "One-third of the people who become disabled in their 50s were injured because of the work they do."

A major drawback in any plan for private accounts is that it will have to account for payments of disability benefits.

As in retirement, the solution is to increase revenue or reduce benefits. If Social Security is replaces by private accounts, people who would begin working after a privatization plan started there will have to be some form of additional disability insurance. In the public discussion going on now, this is a hidden cost.


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