The Short-Run Behavior of the Social Security Trust Funds

Lawrence H. Thompson and Paul N. Van de Water
Additional contact information
Lawrence H. Thompson: Department of Health, Education and Welfare
Paul N. Van de Water: Department of Health, Education and Welfare

Public Finance Review, 1977, vol. 5, issue 3, 351-372

Abstract: The old-age, survivors, and disability insurance trust funds are now running a deficit of more than $5 billion per year. As recently as 1972, however, these trust funds were expected to be in surplus for some time. Simulations with an econometric model of the OASDI system suggest that this turnaround can be explained largely by economic developments unforeseen in 1972. The deterioration in the social security short-term financing picture is due in roughly equalparts to high unemployment and poor real wage growth. Inflation by itself has so far had little effect on the trust fund balances. The simulations also suggest that social security trust fund balances equal to approximately 60% of yearly outlays should be kept on hand if the system is to be able to withstand a recession slightly more severe than the present one without having to raise taxes until unemployment falls below 6%.

Date: 1977
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/109114217700500304 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sae:pubfin:v:5:y:1977:i:3:p:351-372

DOI: 10.1177/109114217700500304

Access Statistics for this article

More articles in Public Finance Review
Bibliographic data for series maintained by SAGE Publications ().