Arnold Kling  

Furman on Social Security

Failure in an Open-Access Orde... Everything You Ever Wanted to ...

Jason Furman writes

Indexing benefit levels for longevity, the retirement age, or the payroll tax rate goes in the right direction – delivering larger adjustments as people live longer – but only captures a small part of the uncertainty about the future.

One way to introduce more robustness into the Social Security program would be to use dependency indexing which links changes in replacement rates or payroll tax rates to changes in the ratio of workers-to-retirees.

This is part of a broader piece on the long-term fiscal gap. It is well worth reading. Thanks to Greg Mankiw for the pointer.

Comments and Sharing

CATEGORIES: Social Security

COMMENTS (1 to date)
Barkley Rosser writes:

Some kind of automatic adjustment might be useful, if properly structured to reflect actual threats of financial problems in social security. However, so far those threats have been wildly exaggerated, including by Jason Furman. Hence, I would not trust a scheme that he would introduce particularly.

Comments for this entry have been closed
Return to top