A balanced, informative account of the major issues, problems, and solutions surrounding our Social Security system.
Since its 1935 inception as a New Deal measure to save millions from impoverishment, our Social Security system has been the subject of endless debate. Both the conservatives who want it privatized and the liberals who want benefit increases agree that the system needs reform. Shaviro (Do Deficits Matter?, 1997) steers a middle path, preferring to let taxpayers choose their own savings plans (like a conservative), but remaining committed to a progressive distribution of wealth (like a liberal). To better explain the opposing positions, the author reviews the pros and cons of Social Security's three major functions: forcing savings, limiting the method of those savings, and redistributing income so that the needy benefit most. Shaviro prefers reforms in this second area, where taxpayers can have a more open savings portfolio under limited privatization. The government could regulate those conservative investments, like Trust Funds, which may count against Social Security. Stock market investments, however, jeopardize the government's entire concept of protecting people from facing poverty at retirement. The author agrees that too many stocks are like playing the ponies, and informs us that less than 60 percent of Americans have enough familiarity with the market. Shaviro is ready to take on privatization reforms, optimistic that only consumer savings choices will be affected, and that a progressive redistribution of wealth can be maintained or even increased.
As important as the topic is, the book could have been dry and limited to economists. Instead, Shaviro theorizes about "the Clown family" and includes political statements, such as "proposing tax increases and benefit cuts to the very voters who would bear them is bad manners and worse career planning for a politician or pundit."