| Building Automatic Solvency
into U.S. Social Security: Insights from Sweden and Germany
Capretta, James C.
The Brookings Institution Policy Brief #151, March 2006, 8p.
"The payroll taxes that support Social Security's "pay–as-you-go"
system will begin to fall short of outlays in 2017 and will be sufficient
to finance only 74 percent of scheduled annual benefits by 2041,
when the Social Security trust fund is projected to be exhausted.[...]
Ideally, U.S. policymakers will reach a consensus on Social Security
solvency reforms. Sweden and Germany have shown that it is possible
and desirable to put in place provisions that can automatically
self-correct underfunding of pay-as-you-go pension systems. The
U.S. should put in place such provisions for Social Security, ensuring
permanent solvency for the program." James C. Capretta
is a Visiting Fellow in the Economic Studies Program at the Brookings
Institution.
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