Financial Aspects of the Social Security 'Problem'

Journal of Economic Issues, Vol. 34, No. 2, June 2000

15 Pages Posted: 28 Jan 2014

See all articles by Stephanie Bell

Stephanie Bell

University of Missouri at Kansas City - Economics

L. Randall Wray

University of Missouri at Kansas City; Bard College - The Levy Economics Institute

Date Written: January 1, 2000

Abstract

Many consider the Social Security system to be in crisis, based on predictions that, after 2020, program expenditures will exceed the revenue generated by a shrinking tax base. "Reform" measures call for increasing revenue, increasing investment returns (by "privatization"), or decreasing benefits. However, reformers are laboring under some misconceptions about the system, and their proposals do not address the fundamental question: How can we ensure that the US economy will have sufficient productive capacity, given its shrinking workforce, to ensure that real resources will be available to provide the goods and services needed by future retirees?

This paper examines the workings of the Social Security Trust Fund (how payments are received and benefits paid), critiques popular reform proposals, and recommends policies that address the availability of real resources rather than financial resources.

Keywords: Social Security reform, Social Security funding, Social Security Trust Fund, funding crises

Suggested Citation

Bell, Stephanie A. and Wray, L. Randall, Financial Aspects of the Social Security 'Problem' (January 1, 2000). Journal of Economic Issues, Vol. 34, No. 2, June 2000. Available at SSRN: https://ssrn.com/abstract=1010338

Stephanie A. Bell

University of Missouri at Kansas City - Economics ( email )

L. Randall Wray (Contact Author)

University of Missouri at Kansas City ( email )

5100 Rockhill Road
Kansas City, MO 64110-2499
United States

Bard College - The Levy Economics Institute

Blithewood
Annandale-on-Hudson, NY 12504-5000
United States

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