4/22/2004: Economist Assesses Social Security Using a 'Real' Trust Fund

National Bureau of Economic Research [NBER]

Working paper. Excerpt: In this paper we investigate why and to what extent the government should have a social security trust fund, and how it should manage the fund in the face of demographic shocks, based on a simple overlapping-generations model. We show that, given an aging population, a trust fund in some form could achieve the (modified) golden rule or to offset the negative income effect of a PAYGO system.