I am intrigued with the idea of personal accounts in Social Security. We should have personal ownership of the accounts in our names. They should be able to be bequeathed to family members, and everyone should be able to build wealth.
However, the idea that the individuals should be allowed to make investment decisions is flawed.
Mostly because it is clear that in an emergency the government will make everyone who has lost money whole, and there is no politician who will support the idea of personal responsibility if it means he won't get re-elected.
So what we would have with personal accounts with (even conservative) options to invest in equities is:
capitalism as long as everything is fine
socialism whenver there is a tremendous downturn.
The end result is that those who are prudent would have to bail out the risk takers in a bad market.
The risk takers would get rewarded in a good market.
So this would encourage everyone to be risk takers because realistically everyone believes they "can't lose".
If we would develop the idea that the government should guarantee that the rules are fair, the laws are being enforced, and everyone has equal opportunity; and that if you make decisions that turn out badly even if it's not due to your own fault, you are responsible and not the public;
I would support more freedom in social security. Because then if something went wrong, the taxpayers wouldn't be on the hook to help give people what they expected in good times.
Yet, the reality is clearly different from this. We have a society that doesn't want to accept any pain willingly.
So we should always think ahead and not set-up a situation where the public loses no matter what.