I've just listened to a 90 minute lecture on this book, though I haven't read it. Based on what I heard, and given the high price of the book, I don't think I want to buy and read it, but maybe another reviewer can change my mind, because I am interested in reading good books about "the Social Security problem."
The author, Mr. Gokhale, spoke for the first 30 minutes, then two other experts provided some comments and feedback, and finally there was a brief question-answer section. It seems that the meat-and-potatoes of this book is about predictive modeling for Social Security. The host of the lecture referred to the book as "wonkish." Well, I would expect any analysis of Social Security to be wonkish. But I would also expect to hear some conclusions expressed in plain language as well; after all, this was a lecture aimed at a lay audience, not mathematical modelers. The entire lecture focused on the challenge of modeling, though I can't say I learned anything useful even about that. Creating good models is a challenge for anyone, not just Social Security policy wonks. After listening for 90 minutes I felt like the consensus was "garbage in, garbage out." This is hardly revelatory.
Anyway, I did manage to get a little more out of the lecture. Mr. Gokhale has come up with a model for the Social Security system which is a bit more pessimistic than the government's models. He said that his model assumes no policy changes and that all the current trends will continue. He also considers six different government "fixes" that have been proposed. Of those six fixes, he says that two are pretty good. At no point in the lecture does anyone describe "the problem" with Social Security that needs to be fixed. If you read the product description on Amazon you will see that "the problem" is that Social Security is going to go bankrupt. We've all heard this before, and the only disagreement seems to be over which year it will go bankrupt. But then, there are those who say that Social Security is not in any danger of going bankrupt, at least not in the sense that it will collapse and disappear. Neither did Mr. Gokhale provide any information about the two fixes that he thought were pretty good (though he did mention them by name - Diamond-Orszag and Liebman-MacGuineas-Samwick - and it should be easy enough to look them up). What do they entail? Raising the retirement age a bit? Decreasing benefits a bit? Increasing the Social Security tax cap a bit, or the general tax rate? Imposing a bit of a means test for benefits? Some or all of the above? And if the problems with Social Security can be fixed, is it really fair to say that it's a "broken system" that's going to "go bankrupt"?
Perhaps it's off topic, but I can't help but mention a couple of comments from the audience. I had to laugh at the 67-year-old university professor of economics who had two jobs (he didn't say what his other job was) and couldn't afford to retire because of the high cost of medical insurance and because his employer "wouldn't let him go because he had so much knowledge and experience." A retired professor can't afford insurance? His employer won't let him go? What, does the university have some kind of military stop-loss policy? :-) And then there was a woman who asked why people who are homemakers and stay-at-home parents, as well as people who work many years as volunteers, aren't covered by Social Security. Her question was essentially ignored, but still, it made me think about the kinds of "productivity" that we value and reward. And then there was another economics professor who said he was still looking for a good Social Security primer for a class he would teach, and he didn't seem too keen on using this book because it was still a work in progress. Even the auther seemed to admit that it was a work in progress, and that he wasn't sure if his model was better than the government's models.
Anyway, like I said, this book may be fine as a one-man challenge to the official government models for Social Security, and in the sense that a challenge can be seen as a "fresh look," it seems to me that it is better suited for those who are already familiar with the official models. But it's not as if the government has been saying that changes to the system aren't necessary. After all, the Social Security tax rate has increased over the years and the age of retirement is being raised. I'm sure that there are more changes in store. But I'm looking for a good primer on the subject that is supported by reasonable models and takes into account "best case" and "worst case" scenarios. For example, perhaps the "worst case scenario" is that when I retire (I'm a baby boomer) I will only receive 80% of what I was "promised," and I will have to downsize my expectations and my lifestyle by 20%. That kind of news is nothing to celebrate, but such information is more useful than being told that the system will go bankrupt.
