Despesa previdenciária: análise da sua composição, efeitos da inflação e bases para uma alternativa intermediária de reforma

The reform of the Social Security system is perhaps the most important item of the agenda of Constitutional reforms in Brazil. Without it, the increase in the (Number of retired people/Number of contributors) ratio will create dramatic fiscal problems in the long term. This article analyzes the evolution of the Social Security expenditures in Brazil during the last 15 years. The focus of the paper is on the composition of expenditures and the trajectory of its real value, with special emphasis on the impact of inflation. After the Real Plan, the possibility that the prices might accomodate the structural pressures for increasing expenditures has practically disappeared. As a consequence, the necessity to reform the retirement system has become more evident. The paper defines a taxonomy of the different proposals of reform, comments on the most relevant issues being discussed within the debate about the Social Security and includes a proposal of reform. This proposal makes only a few changes in legislation and preserves the legal existence of the job time retirement. Nevertheless, it would have a considerable economic impact compared with the preservation of the status quo and would be a more ambitious and more feasible alternative than the one currently being discussed by Congress.