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Political Risk and Social Security Reform

By: Hugh Helco
Published: September 1998
Social Security Brief No. 1 ~ September 1998

Summary: Retirement programs are long-term commitments. They will always depend on America's political process. Every reform depends on government keeping its promises and maintaining the integrity of the system over the long haul. "Political risks" are different from uncertainty about what the future holds. Uncertainties — such as an unexpected change in economic or demographic conditions — can beset any policy. Political riskiness, in contrast, is inherent in the policy itself. It refers to a given plan's vulnerability to being destabilized as time passes, rendering it unsustainable in its original purpose and promised operations. We are more likely to recognize the political risks in the system we have than to predict the new political risks in a significantly restructured system.