terça-feira, 8 de fevereiro de 2005

Leitura recomendada

Why I Support a Privatized Individual Account Social Security, por Gary Becker.


I do not believe that the main advantage of a private account system is that individuals can get a higher return on their old age savings by investing in stocks. There are no free lunches from such investments since the higher return on stocks is related to their greater risk and other trade offs between stocks and different assets. However, neither is there any special “transition” problem in moving to a fully funded privatized system since future generations in some way or another have to pay for the implicit debt due to commitments toward present and future retirees. But it is better to transit smoothly to fund this debt rather than require a sharp increases in taxes on later generations.


As in Chile and other countries with private retirement accounts, the government would guarantee every retiree a minimum income-similar to but larger than the minimum social security guaranteed income under the present United States system. Unfortunately, such guarantees create a “moral hazard”; that is, savers may want to make risky investments that give high payoffs if they succeed since the government partly bails them out if they fail. Or they may not save at all. The minimum required savings rate overcomes the latter incentive to “game” the system, and regulation of which types of investment accounts are approved takes care of the incentive to be overly risk-taking.


There is no guarantee that government interference would not increase further in such a privatized system since the retired would continue to press for additional benefits. But experience shows that governments interfere less when an industry is privatized than when it is a public enterprise, especially in access to capital and financing of industry budget deficits.

So the really strong arguments for privatization are that they reduce the role of government in determining retirement ages and incomes, and improve government accounting of revenues and spending obligations. All the other issues are really diversions because neither advocates or opponents of privatization are asking the most meaningful question about privatizing social security: Is there as strong a political economy case for eliminating government management of the retirement industry as there is for eliminating their management of most other industries? My answer is "yes".

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