The True Cost of Social Security

Alexander W. Blocker, Laurence Kotlikoff and Stephen Ross

No 14427, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Implicit government obligations represent the lion's share of government liabilities in the U.S. and many other countries. Yet these liabilities are rarely measured, let alone properly adjusted for their risk. This paper shows, by example, how modern asset pricing can be used to value implicit fiscal debts taking into account their risk properties. The example is the U.S. Social Security System's net liability to working-age Americans. Marking this debt to market makes a big difference; its market value is 23 percent larger than the Social Security trustees' valuation method suggests.

JEL-codes: G12 G13 G23 G38 H2 H55 H6 (search for similar items in EconPapers)
Date: 2008-10
New Economics Papers: this item is included in nep-pub
Note: PE
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Citations: View citations in EconPapers (5)

Published as The True Cost of Social Security , Alexander W. Blocker, Laurence J. Kotlikoff, Stephen A. Ross, Sergio Villar Vallenas. in Tax Policy and the Economy, Volume 33 , Moffitt. 2019

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Chapter: The True Cost of Social Security (2018)
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