“Will Social Security be around when I’m old?” It’s a question that has been asked and sparked countless discussions for decades. As the years go by, the numbers change but the discussion remains the same. Is there a model already in place that will allow payers to see an actual return on their money? Or will we just keep finding ways to rob Peter in order to pay Paul?
Originally recorded in 2003, Economist Casey Mulligan says that one solution, privatization, is not simply a catch-all term as believed by some, “Well, there’s two kinds of privatization I like to think about. One is the kind of privatization we’ve seen in a few countries around the world, where we lay out really a seventy five-year plan for the economy, and at the end of that trajectory what happens is elderly people pay for themselves. The government doesn’t pay them anymore. The second kind of privatization I see involves such a plan and actually sticking to it. And those are two very different things. We don’t have much experience in the world with a country actually following through with these seventy five-year plans- which can easily happen- and has happened- is after the plan we’re getting closer to the end of the plan, political forces and other forces change the plan in such a way that the elderly still collect funds from the government, and the young still pay to support those programs.”
Listen to the 2003 discussion between Milligan and Kevin Murphy as they explore the economic realities of the issue in the latest episode of the Free To Choose Media Podcast, Social Security.
Original Record Date: 2003