Common Sense on Social Security
Sponsor of the Social Security Solvency Simulator
An Objective, Nonpartisan Resource
on Social Security Reform
Our work is guided by three principles: (1) Facts
are more important than ideology; (2) The public deserves access
to the facts; (3) Provide simulation tools so people can make sense
of the issues.
Note: This is archival material. It was current in 2004.
As the Social Security solvency problem remains unsolved, this website's analytic
framework remains relevant, but the website has not been updated for some time.
Sensibly-Asked Questions (SAQ's)
on Social Security Reform
This section could be called "FAQ's on Social Security
Reform," but we like Sensibly-Asked Questions better. Here we address
the following SAQ's: How does Social Security work? Is there really a
financing problem? What's the reasonable way to go about fixing it? Why
is the debate so polarized? What can I do to help?
Book on Social Security Solvency
How to critique the Republican approach - the unfounded optimism of the GOP,
and how its reform plan shrivels when analyzed realistically. How to critique
the Democratic approach - the four evasions that make up the sum of the Democratic reform
approach. A responsible Republican strategy. A responsible
Democratic strategy. If the economy grows faster than predicted - its
potential effects on both strategies. An all-sided analysis based on Simcivic's
simulation modeling tool.
Do Members of Congress Pay Into Social Security?
Perhaps you've read the e-mail message: "Social
Security could be very good if only one small change were made. And that
change would be to jerk the Golden Fleece Retirement Plan from under the
Senators and Congressmen. Put them into the Social Security plan with
the rest of us and then watch how fast they would fix it."
Has the author of this email gotten the facts straight?
Do Members of Congress receive Social Security or not?
Social Security Solvency Simulator
- Early Release Version
Click on the link above to use the Internet's only fully-featured
Social Security Solvency Simulator. Our simulation tool allows you to
test all the key strategic options - cutting benefits, raising the payroll
tax, allowing the Trust Fund to invest in stocks and corporate bonds,
creating Personal Retirement Accounts (PRA's), a new injection of capital,
ongoing federal subsidies, borrowing - and see their impact.
Has lasting solvency been achieved? Have scheduled benefits
been cut? Will benefits be payable as scheduled? Has an overly aggressive
PRA program swallowed the stock market alive? The Simulator's charts show
you the likely results. NOTE: The Simulator was written in Java almost ten years
ago. It has not been upgraded for many years, and may not function properly in
browsers with newer versions of Java.
Three Pioneering Articles on Social Security Reform
(plus an Excel-based solvency forecasting model)
Social Security Reform: Breaking
Social Security reform faces a difficult dilemma. Leave
the program unfunded, and face the inevitability of deep benefit cuts
in the future? Turn Social Security into a funded retirement program using
personal accounts, and bear an up-front conversion cost that exceeds $5
trillion? Or use a stock-rich Trust Fund as the investment vehicle, and
watch Social Security soak up nearly a quarter of the stock market?
It's no wonder Congress and the nation are stalemated on how best to fix
the program. But there is a way out. "Breaking the Stalemate" offers a
centrist strategy for ensuring solvency, protecting benefits, and holding
the line on the payroll tax.
Section 1. Three Critical
Section 2. The Quarter Century From Hell
Section 3. Closing the Gap: Six Options
Section 4. Narrowing the Choices
Section 5. The True Meaning of Long-Term Solvency
Section 6. Removing the Stock Market's Rose-Colored
Section 7. The Conservative Morality Play
Section 8. The Liberal Morality Play
Section 9. Evaluating the Two Arguments
Section 10. Combining the Best of Both
Section 11. A Low Risk Trust Fund Strategy
Section 12. A Low Risk PRA Strategy
Section 13. Are Any of the Strategies Affordable?
Section 14. A Multi-Stakeholder Rating Test
Section 15. One Program, One Decision
Are Seven Percent Returns Realistic? (2005 Revision)
Many argue that real returns to stock
investors have averaged seven percent in the past and will continue to
do so in the future. The key linkages that drive stock market returns
suggest otherwise. Fresh analysis, solid research, significant graphs.
Are Seven Percent Returns Realistic? (1999 Original)
The Size/Return Paradox
Reformers need to take a hard look at the Size/Return
Paradox. An overpriced stock market can soak up more investment from Social
Security, but its long-run returns are certain to be somewhat lower. An
underpriced stock market will have much higher returns, but it won't be
able to absorb as much Social Security investment.
Our Solvency Forecasting Spreadsheet
Anyone interested in learning more about Social Security
reform can test a wide range of options by using our Solvency Forecasting
Spreadsheet Model. This page explains the Model's Input-Output Section.
By experimenting, maybe you'll find the best possible solution. You can
obtain a copy for yourself by emailing us at firstname.lastname@example.org
(Our Excel spreadsheet is not nearly as advanced as
our Solvency Simulator, but it does have two advantages. You can see all
the calculations. And solution scenarios can be saved electronically.)