Investment-Based Social Security

Abstract:     
According to Senator Gramm, the impending bankruptcy of the current social security system won't be just a financial crisis, it will be a human tragedy, not unlike the turmoil of the Great Depression. The funding crisis of social security under the status quo, he argues, boils down to two bad choices: Americans will have to choose between lost opportunity for our children due to higher taxes that choke off economic growth, or abandoned security for our parents due to benefit cuts.

There is a better way, Senator Gramm believes. It requires doing what social security promised but never delivered. It requires that we save and invest now rather than tax and borrow later. But it is not just money at stake here, according to the author. Tax tomorrow and we diminish our children's future, cut benefits tomorrow and we harden our parents' retirement. Save today and we save our children's dreams tomorrow. Invest today and we invest in our parents' security.

Accepted Paper Series