'saving Social Security: A Better Approach': An Update

摘要

In the November/December 2008 issue, Thomas K. Philips and I highlighted how Social Security (SS) could be permanently reformed by using the Modigli-ani-Muralidhar (MM) approach. The idea would be to convert SS to an efficiently invested, partially funded scheme to be overseen by a blue ribbon board and with an innovative swap with the U.S. Treasury to ensure the provision of previously promised defined benefits. The transition to a partially funded scheme required, however, a permanent increase in contributions of approximately 1.2 percent.rnSince the time of writing our article, two "fortuitous" events have presented the United States with a unique opportunity to implement this approach immediately. The events are (1) the publication of the 2008 OASDI (Old Age, Survivors, and Disability Insurance) Trustees Report, which includes a new actuarial study, and (2) the creation of TARP (the Troubled Asset Recovery Program).