A post by Brad DeLong covers some of the for- and against- arguments on Social Security privatization. The part I'm most sympathetic to is this one:
"Kent Smetters and company might say that Kinsley's (3a) is wrong: that once the privatized parts of Social Security are off the books, the Republican High Politicians will have no option but to propose serious spending cuts or tax increases in order to bring the Federal Government's General Fund into long-term balance."
Social Security is a partially pre-funded retirement program, so if the federal government can no longer use the prefunded SS surplus to partially cover up the deficit, then there will be a better chance to fix the deficit, especially by letting part of awful Bush tax cuts sunset as currently planned. That's why the Bush accounting proposal of to simply declare the increased costs from privatization ans not part of the deficit is truly horrible.
Absent this Enron-style accounting suggested by the Bush administration, I still think partial privatization can have some benefits.