PRIVATIZING SOCIAL SECURITY IN THE UNITED STATES: WHY AND HOW?
Privatization of social security is spreading from Chile to other parts of the world. Chile, Peru, Argentina, England, Sweden, and Australia have already privatized, and Bolivia, Mexico, and Italy are likely to join them. Is privatizing the U.S. Social Security System a good idea? What would it mean for the U.S. economy? Who would benefit, and who would lose? Is there an easy way to privatize the U.S. system? This paper provides some answers to these questions. It argues that privatizing social security has the potential for substantially increasing capital formation, economic efficiency, and living standards. The paper also offers a clear and simple plan for privatizing social security in the United States called the Personal Security System.
Laurence J. Kotlikoff, Boston University