Would Saving U.S. Social Security Raise National Saving?

IMF Policy Discussion Papers, July 1, 1999

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Would Saving U.S. Social Security Raise National Saving?

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Bibliographic details

• Authors: Jan Walliser
• Published: July 1, 1999
• Series: IMF Policy Discussion Papers
• DOI: https://doi.org/10.5089/9781451971484.003

Summary

• Analysts agree that raising national saving is one of the key objectives of social security reform in the United States.
• The paper compares saving responses across proposals and outlines difficulties in making those comparisons.
• Key difficulties arise from:
  • the unsustainability of the current social security system, and
  • the uncertainty regarding the use of projected budget surpluses.
• The paper builds on previously developed arguments, discusses three typical reform plans, and draws conclusions about the relationship between social security reform and the long-run sustainability of fiscal policy.

Major analytical points

• Comparison of saving responses is essential to judge the merits of social security reform proposals.
• The unsustainability of the current social security system complicates assessment of reform impacts on national saving.
• Uncertainty about how projected budget surpluses would be used further complicates analysis of saving responses.

Reform plans and scenarios discussed

• The paper discusses three typical reform plans (the source text indicates three plans are discussed but does not provide plan-specific details on the landing page).
• It draws conclusions about how different reform approaches relate to the long-run sustainability of fiscal policy.

Policy implications and considerations

• Assessments of social security reform should explicitly account for:
  • the fiscal sustainability of the existing system, and
  • policy choices regarding the allocation or use of projected budget surpluses.
• Comparisons of proposals must carefully address uncertainty about surplus usage to evaluate effects on national saving.

Content in this bundle

• Would Saving U.S. Social Security Raise National Saving? - PDP/99/7
  • Would Saving U.S. Social Security Raise National Saving? - PDP/99/7 (Markdown version)
  • Would Saving U.S. Social Security Raise National Saving? - PDP/99/7 (PDF)