THE WAY FORWARD

Nils H Hakansson

Chapter 7 in Social Security's Investment Shortfall: $8 Trillion Plus — and The Way Forward:Plus How the US Government's Financial Deficit Reporting = 64 Madoffs, 2012, pp 57-63 from World Scientific Publishing Co. Pte. Ltd.

Abstract: AbstractThe recent period has seen a clamor calling for reform of the Social Security System of the United States. Most proposals (see e.g., Blinder, 2010; Brandon, 2010; Farrell, 2010; Malkiel, 2010; and Peterson, 2010) have called for rather modest changes. The thrust of the present analysis, as is already evident, is that a more comprehensive, yet easily implemented, restructuring is needed.It is evident that the Social Security Trust Fund is not in the best of hands. It clearly needs to disengage from being a political football. What is required is a change in the mindset that will view Social Security contributions as genuine (passive) investments into a minimal safety-net plan, a plan that can expect above average net-of-fees investment returns for the purpose of funding a combination of inflation-indexed, life-time annuity-based retirement, life insurance, and (when applicable) disability benefits.

Keywords: Quantitative Modelling; Statistical; Computer; Marketing; Neural Networks; Fuzzy Logic; K-Clique Model; Meta-Heuristics Investment; Social Security; Public Pension Plans; Trust Funds; Public Policy; Government Financial Reporting; Unified Budget; Economic Growth; National Debt; Pension Funds; Risk Premium; Entitlements; Passive Investments; Short-Term Borrowing; Private Social Security Accounts; Minimal Safety Net; Personal Safety Net; Long-Term; Total Returns; Compound Returns; Economies Of Scale; Fees; Administrative Expenses; Productivity; Administrative Independence; Transaction Costs; Market Impact; Mean Reversion; International Stocks; Moral Hazard; Economic Efficiency; Professional Management; Payroll Tax; Benefit; Beneficiary; Retirement; Survivor; Life Insurance; Disability Insurance; Contribution; Insurance Premium; Great Depression; Greenspan Commission; Inflation (search for similar items in EconPapers)
Date: 2012
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