Social Security and Government Deficits: When Should We Worry?

Abstract:     
In this Article, I critically examine the assumption that the Social Security system faces a financing crisis and that the government can avert the crisis only by acting now to cut benefits or to raise taxes. The best conclusion we can draw from the current evidence is that the system is not doomed and that it is not necessary to institute immediate changes. We should, of course, continue to monitor the situation closely to determine whether future changes become necessary. This conclusion is further strengthened by the likelihood that any changes the government makes to the Social Security system today will be regressive, harming the middle class and the least fortunate in order to forestall a crisis that may never occur or that future progressive changes in policy will be able to address.

Number of Pages in PDF File: 35

Keywords: Social Security, Government Deficits

JEL Classification: E62, H55, H61, H62

Accepted Paper Series