Saving Social security : a balanced approach /

Saving Social Security adds to a long list of books and scholarly papers on a subject of terrible importance. Diamond (Massachusetts Institute of Technology) and Orszag (Brookings Institution) carefully footnote and reference their perspective, yet their political bias of "bigger government is good" and "high taxes don't have negative incentive effects" color their conclusions. They dismiss the wealth effect possible for privately held accounts, arguing that upper-income people already own stock portfolios. They worry that risky investments in private stock holdings might lead to less income for the poor and older people dependent on Social Security income. They propose raising taxes in a progressive fashion to ensure the solvency of the fund, forgetting that higher tax burdens reduce economic activity and lower the base on which the taxes are levied. In sum, they make a strong defense of the current system (with slight modifications), without thinking creatively about serious alternatives, e.g., those supported by the Cato Institute. ^BSumming Up: Optional. Public and academic library collections, upper-division undergraduate and above. E. D. Craig University of Delaware