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Shortcomings Of Social Security

In: Social Security's Investment Shortfall: $8 Trillion Plus — and The Way Forward Plus How the US Government's Financial Deficit Reporting = 64 Madoffs

Author

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  • Nils H Hakansson

    (University of California, Berkeley, USA)

Abstract

Despite being viewed as the most successful of the government’s many programs, Social Security suffers from three serious shortcomings. First, contributions are labeled, and thought of, as a tax rather than as mandatory retirement and insurance contributions which is what they are. Since the contributed funds are invested in Treasury securities, they have all the properties of what we call savings or investments which, like pension funds and personal retirement accounts, are expected to grow over time. In addition, the mindset is often affected by the words used. “Taxes” tend to generate negative reactions while the word “investment” tends to elicit positive connotations…

Suggested Citation

  • Nils H Hakansson, 2012. "Shortcomings Of Social Security," World Scientific Book Chapters, in: Social Security's Investment Shortfall: $8 Trillion Plus — and The Way Forward Plus How the US Government's Financial Deficit Reporting = 64 Madoffs, chapter 4, pages 19-28, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9789814407977_0004
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