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Yale Economist Robert Shiller's Proposal to Reform Social Security
Robert Shiller's Proposal to Fix Social Security
Yale economist, Robert Shiller, floated a novel proposal to "fix" Social Security in a long article in the NY Times June 9, 2013. Unless changes are made the Social Security fund will not be able to maintain current benefits beginning in 2033. Various proposals have been made to deal with this eventuality, ranging from President Bush's proposal to "privatize" Social Security to President Obama's chained CPI proposal which would reduce future cost of living increases in benefits. Shiller's proposal would replace future increases in benefits tied to inflation with changes based on changes in the country's G.D.P. (gross domestic product).
Shiller is critical of Obama's chained CPI proposal claiming that it "solves the wrong problem and, in doing so undermines the integrity of the Social Security system" whose purpose is to "help families" by "reinforcing the intergenerational sharing...that families already provide....It helps retirees by stabilizing their income, and it helps their grown children, who are relieved of any excessive burden of supporting them."
Shiller's proposal which would tie Social Security benefits to a measure of gross domestic product would "align the interests of the retired with society as a whole...because," according to Shiller, "Older Americans should share both the windfalls and the losses with other generations--with working adults, and with children....Why should retired people feel no effect at all from the recession while younger people are suffering.?" And vice versa?
Assuming that the economy continues to grow in the future as it has in the past, Shiller's proposal would result in a greater increase in Social Security benefits than under the current adjustment fomula because benefits have been falling as a percentage of G.D.P. for the past 20 years.
Although his proposal would likely require an increase in the contribution rate by employees and employers, Shiller believes that this would be worthwhile in order to "preserve the integrity of Social Security which is "crucial to our identity as a civil society."
Who is Robert Shiller?--Wikibio
- Robert J. Shiller - Wikipedia, the free encyclopedia
Robert J. "Bob" Shiller (b.1946) is an American economist, academic, and best-selling author. He currently serves as the Arthur M. Okun Professor of Economics at Yale University and is a fellow at the Yale International School of Finance.
Social Security, Fix it or Scrap It?
- Social Security--Fix it or scrap it?
Bush's proposed "reform" of Social Security springs from longstanding haters of FDR and the New Deal. The libertarian CATO Institute has been waging a public relations campaign to gut Social Security for several years. The Bush administration proposa
Social Security Debate in the United States
- Social Security debate in the United States - Wikipedia, the free encyclopedia
This article concerns proposals to change the Social Security system in the United States. Social Security is a social insurance program officially called "Old-age, Survivors, and Disability Insurance" (OASDI), in reference to its three components.