NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Measuring Social Security's Financial Problems

Jagadeesh Gokhale, Kent Smetters

NBER Working Paper No. 11060
Issued in January 2005
NBER Program(s):   PE

The U.S. Social Security system has helped keep many retirees out of poverty. However, according to the Social Security and Medicare Trustees, Social Security faces a future financial shortfall of $10.4 trillion in present value. This enormous imbalance has received little attention in public debates about Social Security. Instead, the media and policymakers continue to focus on the program's trust fund and several other ad-hoc measures that create a misleading impression of the size of Social Security's financial problem. Although the Social Security Trust Fund is not projected to be exhausted until 2042, Social Security's $10.4 trillion present value imbalance is accruing interest and will grow by $600 billion during 2004 alone. The current cash-flow federal budget, however, is biased against reforms that would improve Social Security's finances. As shown herein, a new federal accounting system would remove this bias.

download in pdf format
   (204 K)

email paper

This paper is available as PDF (204 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w11060

Users who downloaded this paper also downloaded these:
Ramey w15464 Identifying Government Spending Shocks: It's All in the Timing
Feldstein and Liebman w8451 Social Security
Feldstein w11098 Structural Reform of Social Security
Kotlikoff, Marx, and Rizza w12696 Americans' Dependency on Social Security
Nishiyama and Smetters w11622 Does Social Security Privatization Produce Efficiency Gains?
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us