The True Cost of Social Security
Chapter in NBER book Tax Policy and the Economy, Volume 33 (2019), Robert A. Moffitt, editor
Implicit government obligations represent the lion's share of government liabilities in the U.S. and many other countries. Yet these liabilities are rarely measured let alone properly adjusted for their risk. This paper shows, by example, how modern asset pricing can be used to value implicit fiscal debts taking into account their risk properties. The example is the U.S. Social Security System's net liability to working-age Americans. Marking this debt to market makes a big difference. Its market value is 86 percent higher than the Social Security trustees' valuation method suggests.This chapter is no longer available for free download, since the book has been published. To obtain a copy, you must buy the book.
You may be able to access the full text of this document via the Document Object Identifier.
Document Object Identifier (DOI): https://doi.org/10.1086/703231This chapter first appeared as NBER working paper w14427, The True Cost of Social Security, Alexander W. Blocker, Laurence J. Kotlikoff, Stephen A. Ross