Measuring Social Security's Financial Outlook within an Aging Society

16 Pages Posted: 15 Feb 2012

See all articles by Jagadeesh Gokhale

Jagadeesh Gokhale

Cato Institute

Kent A. Smetters

University of Pennsylvania - Business & Public Policy Department; National Bureau of Economic Research (NBER)

Date Written: March 30, 2006

Abstract

Gokhale and Smetters put forward some criticisms concerning the indicators currently used to assess the financial sustainability of the U.S. Social Security program. They argue that these indicators create a misleading impression of the program’s financial outlook and are biased against potential reforms that could improve the program’s finances. The authors propose as alternative indicators: the “open-group unfunded obligations”, which measure the imbalance arising from providing benefits to all past, present and future generations in excess of their payroll taxes in present value, and the “closed-group unfunded obligations”, which exclude future generations from the calculation.

Suggested Citation

Gokhale, Jagadeesh and Smetters, Kent, Measuring Social Security's Financial Outlook within an Aging Society (March 30, 2006). Available at SSRN: https://ssrn.com/abstract=2005196 or http://dx.doi.org/10.2139/ssrn.2005196

Jagadeesh Gokhale (Contact Author)

Cato Institute ( email )

1000 Massachusetts Avenue, N.W.
Washington, DC 20001-5403
United States

Kent Smetters

University of Pennsylvania - Business & Public Policy Department ( email )

3641 Locust Walk
Philadelphia, PA 19104-6372
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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