Issues in Privatizing Social Security (MIT Press): Report of an Expert Panel of the National Academy of Social Insurance

Review This book will be cited and quoted for many years to come as social security reform is debated in the United States and in many other countries. Its level and style make it accessible to all participants in, and students of, the social security reform debate, whatever their background. (Laurence S. Seidman, Department of Economics, University of Deleware) Product Description Two types of changes to Social Security have been proposed. One would keep the current defined-benefit structure but build and maintain a larger trust fund, to be partially invested in stocks and corporate bonds. The other would set up individual funded accounts, also to be partially invested in private markets. Both would raise taxes or lower benefits in the near term to increase funds for paying future benefits.This study addresses many important aspects of these politically charged proposals. The questions discussed include: Should Social Security have more advance funding? Should Social Security funds be invested in the stock market? If investments are organized by the government, what independent institutions would shield portfolio decisions and corporate governance from political pressures? If investments are privately organized, what would be the regulatory structure? Finally, should Social Security include individual defined-contribution accounts or stay with traditional defined benefits? The National Academy of Social Insurance is a nonprofit, nonpartisan organization whose mission is to conduct research on and enhance public understanding of social insurance, to develop new leaders, and to provide a forum for the exchange of ideas on issues related to social insurance. About the Author Peter Diamond is John and Jennie S. McDonald Professor of Economics at MIT. He received the 2010 Nobel Prize in Economics.