Privatizing social security

by Martin S. Feldstein

Although social security is facing enormous fiscal pressure in the face of an aging population, there has been relatively little published on the fundamentals of essential reform through privatization. Privatizing Social Security fills this void by studying the methods and problems involved in shifting from the current system to one based on mandatory saving in individual accounts. The aging of the population will raise the cost of maintaining the existing pay-as-you-go tax financed system of social security pensions. Government actuaries estimate that the payroll tax rate would have to...