Michael Butler, Kristen Houston and Greg Cheadle

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Presented by Michael Butler, Kristen Houston and
Greg Cheadle
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Agenda

• Brief History of Social Security
• Neoclassical perspective
• Problems with current system
• Assumptions
• Keynesian perspective
• Problems with current system
• Assumptions
• Structuralist perspective
• Problems with the current system
• Assumptions

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History of Social Security

• Four Distinct Developments
• Industrialization
• Urbanization
• Evolution in the Family
• Increase in life expectancy
• Three Early programs
• Share our Wealth
• The Townsend Plan
• Ham Eggs

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Social Security Then Now

• Then
• 2 Tax rate
• Retirement Age 65
• Retirement Benefits only
• 1591 Beneficiary Ratio

• Now
• 12.4 Tax rate
• Retirement Age 67
• Additional Benefits
• 3.31 Beneficiary Ratio

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History of Social Security

• In 1990 51, but by 2030 it will drop to 21

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Neoclassical Social Security issues

• Show me the Money
• Where is the beef?
• Working hard, or hardly working?
• There are no guarantees in life

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Neoclassical Solution

• Just say No
• Tired of this guy?
• Dont pull an Enron
• Master of your Domain

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Neoclassical Strengths Weaknesses

• Weaknesses
• People have the right to be stupid
• Wal-Mart does not have enough room for every one

• Strengths
• This is your Fathers Oldsmobile
• Like the King says Have it your way

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Keynesian Social Security Issues

• Government control not always necessary
• Elimination of costly overhead
• People need choice

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Keynesian Solution

• Continue with the notion of Privatization
• Stop spending surplus for future beneficiaries
• Avoid a flip the switch scenario

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Keynesian Strengths Weaknesses

• Strengths
• Reduction of Government Overhead
• More stable financial system

• Weaknesses
• Logical Loop
• Peoples trust of government is not addressed

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Structuralist Social Security Issues

• The first step in the right direction
• Tune-up is necessary
• More Taxes needed

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Structuralist Solution

• Tax hike
• Rise Retirement Age
• Increase Cap on Income Taxes

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Structuralist Strengths Weaknesses

• Strengths
• Improvement on a proven system
• R.E.S.P.E.C.T

• Weaknesses
• People hate Taxes
• Assumes that Government overhead is always good

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Resources for further study

• The Coming Generational Storm (Laurence j.
  Kotlikoff Scott Burns)
• www.cato.org
• Karl Marx on Society and Social Change
• www.ssa.gov
• http//web.mit.edu/krugman/www/
• www.prospect.org

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QA
Any Questions?