From Publishers Weekly
Reforming Social Security is one of the most important and complex issues facing the country, and one of the most misunderstood. This well-written and well-argued primer should help dispel the myths and misinformation surrounding the debate. Benavie, an economist and author of Deficit Hysteria, casts a skeptical eye on the alarmism about Social Security's eventual bankruptcy, noting that minor adjustments to the system, like small tax increases and benefit reductions or raising the cap on taxable earnings, would make the system solvent for the foreseeable future. He then turns to the two major reform proposals: privatization, which would let individuals place some of their payroll taxes in private investment accounts, and what he calls "diversification," which would let the government invest some of the Social Security trust fund in the stock market. Neither plan is guaranteed to give better returns to retirees than the current system, he argues, and both entail serious risks: privatization would sharply increase administrative costs and put individual retirees at the mercy of the stock market and unscrupulous investment advisers, while diversification would embroil the government in the affairs of private corporations to an unprecedented degree. Benavie gives a lucid account of the dollars-and-cents details underlying the controversy, while arguing that the real issue is not financial, but ideological-whether we wish to abandon the ideals of social solidarity and providing for the poor that are enshrined in the current system in favor of individual autonomy and potentially high returns.
Copyright 2002 Reed Business Information, Inc.
From a noted economist-author (DeficitHysteria
, 1998) comes a reasoned look at Social Security, demystifying a lot of the rumors surrounding this U.S. public pension. Will Social Security be bankrupt soon? Aren't privatization or diversification two plausible panaceas? What have other countries experienced during pension reform? The answers, says the author, are not necessarily cut and dried. Allowing part of the monies to be invested in the stock market, for instance, may just as easily decrease retirement income as increase it. Though Social Security will need additional revenues, perhaps beyond the payroll tax base, it's not likely to go belly-up. Finally, Benavie points out some little-known benefits of this much-maligned system: it's portable, provides automatic protection against inflation, and features low-cost administration. A book to be sent to every member of Congress. Barbara JacobsCopyright © American Library Association. All rights reserved