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Fixing Social Security — What Would Bismarck Do?

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  • Kotlikoff, Laurence J.

Abstract

Social Security needs to be fundamentally reformed without undermining its legitimate mission — forcing people to save and insure and providing forms of social insurance that the private market would either not provide or provide poorly. Although the system has done great good, it is incomprehensible, inefficient, inequitable, and, most important, insolvent. This paper lays out a simple, modern version of Social Security that Bismarck would surely support. My proposed Personal Security System is fully funded, transparent, efficient, fair, and progressive. It features personal accounts that are collectively invested by the government (not Wall Street) at zero cost to workers.

Suggested Citation

  • Kotlikoff, Laurence J., 2011. "Fixing Social Security — What Would Bismarck Do?," National Tax Journal, National Tax Association;National Tax Journal, vol. 64(2), pages 415-428, June.
    • Handle: RePEc:ntj:journl:v:64:y:2011:i:2:p:415-28
    DOI: 10.17310/ntj.2011.2.07
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    References listed on IDEAS

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    1. Diamond Peter A & Orszag Peter R, 2005. "Saving Social Security: The Diamond-Orszag Plan," The Economists' Voice, De Gruyter, vol. 2(1), pages 1-9, April.
    2. Krueger, Dirk & Kubler, Felix, 2004. "Computing equilibrium in OLG models with stochastic production," Journal of Economic Dynamics and Control, Elsevier, vol. 28(7), pages 1411-1436, April.
    3. Peter A. Diamond & Peter R. Orszag, 2005. "Saving Social Security," Journal of Economic Perspectives, American Economic Association, vol. 19(2), pages 11-32, Spring.
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    Cited by:

    1. Frédéric Gannon & Florence Legros & Vincent Touzé, 2020. "Sustainability of pension schemes. Building a smooth automatic balance mechanism with an application to the us social security," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(6), pages 377-401.
    2. repec:hal:spmain:info:hdl:2441/1nnmnobpu685qait9jaqir07rn is not listed on IDEAS
    3. Frédéric Gannon & Florence Legros & Vincent Touzé, 2020. "Sustainability of pension schemes. Building a smooth automatic balance mechanism with an application to the us social security," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(6), pages 377-401.

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