SSP No. 18 November 29, 1999

Social Security

Social Security Is Still a Hopelessly Bad Deal for Today's Workers

by Peter J. Ferrara

Peter J. Ferrara is chief economist and general counsel with Americans for Tax Reform and a senior fellow with the Cato Institute. He is the coauthor, with Michael Tanner, of A New Deal for Social Security.

Executive Summary

The argument that Social Security is a bad deal for today’s workers and that they would get higher returns and benefits by investing through personal accounts instead has gained broader and broader acceptance. This view has greatly fueled reforms and proposals in the United States and abroad that are based on personal, private investment and insurance accounts.

However, the National Committee to Preserve Social Security and Medicare recently released a voluminous study by John Mueller arguing that Social Security would provide higher returns and benefits than a system of personal investment accounts for all workers today, of all income levels and family combinations. That conclusion, directly contradicting a wide range of analysts, institutions, leaders, and countries around the world, results from extreme and untenable assumptions:

Full text of SSP No. 18 (PDF, 18 pp, 312 Kb)