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The market to the rescue? The promise - and price - of the new social security investment proposals

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  • Susan Miller

Abstract

Three new plans for reforming Social Security financing recommend investing a portion of future payroll deductions in the financial markets. The plans aim to shore up Social Security's trust fund, improve individual returns, and enhance national saving. This analysis concludes, however, that the effectiveness of the plans would depend largely on individual saving and investment decisions, government fiscal policy, and developments in the financial markets. In addition, the proposed reforms could expose the program to unprecedented market risk.

Suggested Citation

  • Susan Miller, 1997. "The market to the rescue? The promise - and price - of the new social security investment proposals," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 3(Aug).
    • Handle: RePEc:fip:fednci:y:1997:i:aug:n:v.3no.10
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    References listed on IDEAS

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    1. Feldstein, Martin, 1996. "Social Security and Saving: New Time Series Evidence," National Tax Journal, National Tax Association;National Tax Journal, vol. 49(2), pages 151-164, June.
    2. Feldstein, Martin & Liebman, Jeffrey B., 2002. "Social security," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 4, chapter 32, pages 2245-2324, Elsevier.
    3. Feldstein, Martin, 1996. "Social Security and Saving: New Time Series Evidence," National Tax Journal, National Tax Association, vol. 49(2), pages 151-64, June.
    4. Atkinson, A.B., 1987. "Income maintenance and social insurance," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 2, chapter 13, pages 779-908, Elsevier.
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