What are the potential impacts of privatizing social security as discussed in 'Arguing with Zombies'?

In his book 'Arguing with Zombies', Paul Krugman, a Nobel Prize winner in Economic Sciences, debunks several controversial issues. One of them is the misconception about social security. He explains that social security is not a burden but a safety net funded by a payroll earnings tax, similar to how gasoline taxes fund highway maintenance. He also debunks the idea that privatizing social security would lead to efficiency. In fact, he argues that it would increase management fees, reduce net returns by over 25%, and potentially cause widespread poverty among the elderly.

Government-run social security is more efficient than private sector alternatives. While many believe that governments have bloated bureaucracies and the private sector delivers efficiency, the opposite is true for social security. Privatization would significantly increase management fees to be paid to investment companies and reduce net returns by over 25%. In contrast, the government spends less than 1% of social security revenues on overheads.