Mankiw passes along an old - i.e. when I was five years old - Newsweek column from Paul Samuelson that praises social security for being actuarially unsound and, dare we even repeat it, a Ponzi scheme. Put differently, he makes the same point I made yesterday though more elegantly: calling it a Ponzi scheme is being honest, and there is nothing wrong with pay-as-you go pension schemes if you've got the economic and/or population growth to support them. Trouble is, we don't.
Step 1 is admitting you have a problem. That requires honesty about the design of our institutions.
Who was my favorite student this term?
1 year ago