Privatization of social security: The transition issue

Social Philosophy and Policy

Volumn 14, Issue 2, 1997, Pages 145-163

  Ferrara, Peter J ^a  

^a NONE

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EID: 0007418132     PISSN: 02650525     EISSN: None     Source Type: Journal    
DOI: 10.1017/s0265052500001850     Document Type: Article

References (30)

1. A 1994 poll by Luntz Research found that 82 percent of adults under thirty-five supported the idea erf "directing part of [their] Social Security taxes to a personal retirement account like an IRA which could be kept at any financial institution they would like, and receiving less in Social Security benefits from the government." A 1995 Luntz poll of all adults found the public supporting such an option by 77 percent to 14 percent. In 1996, McInturff and Associates conducted a nationwide poll for the Cato Institute which found the public supporting the idea by 68 percent to 11 percent. These poll results are reviewed in Peter J. Ferrara, A Plan for Privatizing Social Security (Washington, DC: Cato Institute, 1997).
2. Peter J. Ferrara, John C. Goodman, and Merrill Matthews, Jr., Private Alternatives to Social Security in Other Countries, NCPA Study No. 200 (Dallas: National Center for Policy Analysis, 1995); World Bank Policy Research Report, Averting the Old Age Crisis (New York: Oxford University Press, 1994).
3. Peter J. Ferrara, John C. Goodman, and Merrill Matthews, Jr., Private Alternatives to Social Security in Other Countries, NCPA Study No. 200 (Dallas: National Center for Policy Analysis, 1995); World Bank Policy Research Report, Averting the Old Age Crisis (New York: Oxford University Press, 1994).
4. See Ferrara, A Plan for Privatizing Social Security; and Peter J. Ferrara, "The New Politics of Social Security," Wall Street Journal, March 8, 1996, p. A19.
5. See Ferrara, A Plan for Privatizing Social Security; and Peter J. Ferrara, "The New Politics of Social Security," Wall Street Journal, March 8, 1996, p. A19.
6. These include Peter J. Ferrara, Social Security: The Inherent Contradiction (Washington, DC: Cato Institute, 1980); Peter J. Ferrara, ed., Social Security: Prospects for Real Reform (Washington, DC: Cato Institute, 1985); Peter J. Ferrara, Social Security Rates of Return for Today's Young Workers (Washington, DC: National Chamber Foundation, 1986).
7. These include Peter J. Ferrara, Social Security: The Inherent Contradiction (Washington, DC: Cato Institute, 1980); Peter J. Ferrara, ed., Social Security: Prospects for Real Reform (Washington, DC: Cato Institute, 1985); Peter J. Ferrara, Social Security Rates of Return for Today's Young Workers (Washington, DC: National Chamber Foundation, 1986).
8. These include Peter J. Ferrara, Social Security: The Inherent Contradiction (Washington, DC: Cato Institute, 1980); Peter J. Ferrara, ed., Social Security: Prospects for Real Reform (Washington, DC: Cato Institute, 1985); Peter J. Ferrara, Social Security Rates of Return for Today's Young Workers (Washington, DC: National Chamber Foundation, 1986).
9. Board of Trustees of the Federal Old-Age and Survivors' Insurance and Disability Insurance Trust Funds, 1996 Annual Report (Washington, DC, 1996). For a thorough discussion of the basis of this long-term financing crisis, see Ferrara, Social Security: The Inherent Contradiction, chs. 2 and 5; and Mark Weinberger, Social Security: Facing the Facts, Cato Institute Social Security Paper No. 3 (Washington, DC: Cato Institute, 1996).
10. Board of Trustees of the Federal Old-Age and Survivors' Insurance and Disability Insurance Trust Funds, 1996 Annual Report (Washington, DC, 1996). For a thorough discussion of the basis of this long-term financing crisis, see Ferrara, Social Security: The Inherent Contradiction, chs. 2 and 5; and Mark Weinberger, Social Security: Facing the Facts, Cato Institute Social Security Paper No. 3 (Washington, DC: Cato Institute, 1996).
11. Board of Trustees of the Federal Old-Age and Survivors' Insurance and Disability Insurance Trust Funds, 1996 Annual Report (Washington, DC, 1996). For a thorough discussion of the basis of this long-term financing crisis, see Ferrara, Social Security: The Inherent Contradiction, chs. 2 and 5; and Mark Weinberger, Social Security: Facing the Facts, Cato Institute Social Security Paper No. 3 (Washington, DC: Cato Institute, 1996).
12. Ferrara, Social Security Rates of Return for Today's Young Workers; William G. Shipman, Retiring with Dignity: Social Security v. Private Markets, Cato Institute Social Security Paper No. 2 (Washington, DC: Cato Institute, 1995). For a thorough discussion of the basis of this problem, see Ferrara, Social Security: The Inherent Contradiction, chs. 2 and 4.
13. Ferrara, Social Security Rates of Return for Today's Young Workers; William G. Shipman, Retiring with Dignity: Social Security v. Private Markets, Cato Institute Social Security Paper No. 2 (Washington, DC: Cato Institute, 1995). For a thorough discussion of the basis of this problem, see Ferrara, Social Security: The Inherent Contradiction, chs. 2 and 4.
14. Ferrara, Social Security Rates of Return for Today's Young Workers; William G. Shipman, Retiring with Dignity: Social Security v. Private Markets, Cato Institute Social Security Paper No. 2 (Washington, DC: Cato Institute, 1995). For a thorough discussion of the basis of this problem, see Ferrara, Social Security: The Inherent Contradiction, chs. 2 and 4.
15. Martin Feldstein estimates that as a result of this effect, Social Security reduces national savings by 30 to 40 percent; see Martin Feldstein, "Social Security, Induced Retirement, and Aggregate Capital Accumulation," Journal of Political Economy, vol. 82, no. 5 (September-October 1974);
16. and Martin Feldstein and Anthony Pellechio, "Social Security Wealth: The Impact of Alternative Inflation Adjustments," Conference on Financing Social Security, American Enterprise Institute (Washington, DC, 1977).
17. For a thorough discussion of this issue, see Ferrara, Social Security: The Inherent Contradiction, ch. 3.
18. Peter J. Ferrara and John C. Goodman, Social Security and Race, NCPA Policy Report No. 128 (Washington, DC: National Center for Policy Analysis, 1987).
19. Ferrara, Social Security Rates of Return for Today's Young Workers.
20. For a more thorough discussion of these issues, see Ferrara, Social Security: The Inherent Contradiction, ch. 6.
21. I set out the full proposal in A Plan for Privatizing Social Security (supra note 1).
22. These rules allow broad investment choice among stocks, bonds, and other market vehicles, including foreign issues, but preclude the most risky, highly leveraged instruments, or non-interest-bearing commodities, such as gold.
23. Ferrara, Social Security Rates of Return for Today's Young Workers, p. 15.
24. Martin Feldstein, "The Missing Piece in Policy Analysis: Social Security Reform," American Economic Review, vol. 86 (May 1996).
25. Social Security Board of Trustees, 1996 Annual Report, table III.B.4.
26. Congressional Budget Office, The Economic and Budget Outlook: Fiscal Years 1997-2006 (Washington, DC: U.S. Government Printing Office, May 1996), table 4-3, p. 77.
27. Ferrara, Social Security Rates of Return for Today's Young Workers.
28. The Social Security benefits owed to the previous working generation at the time of the reform would be somewhat less than the amount calculated here, which was the future benefits to be paid to the current working generation at the time of the reform. Due to wage growth over time, the Social Security benefits for the current working generation would be higher than those for the previous working generation. Consequently, paying for the previous generation's benefits out of the investment returns of the initial working generation at the time of the reform would reduce the total value of those accumulated investments and returns by less than the 10 percent calculated above.
29. Martin Feldstein, "Social Security and the Distribution of Wealth," Journal of the American Statistical Association, November 1976.
30. Sam Beard, Restoring Hope in America: The Social Security Solution (San Francisco: Institute for Contemporary Studies, 1996).