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Sooner is Better in Social Security Reform

By: Michael J. Boskin
Published: September 1998
Social Security Brief No. 2 ~ September 1998

Summary: Social Security is important. It has brought down poverty rates among the elderly, but at the same time is a large share of federal spending and taxes. Changes in Social Security will also affect Medicare, labor force participation, and savings. Reforming Social Security is an urgent priority. Today, we have the opportunity to adopt reforms that would promote economic growth, which will make it easier to support an aging society. The United States has advantages that our trading partners lack: we face a less dramatic demographic shift, and our economy is stronger. Making changes soon allows for a more gradual phase-in, and lets workers adjust their plans. It would also head off pressure for large future tax increases which would impede economic growth and exacerbate the problem of paying for Social Security and Medicare.