Privatizing Social Security: Administration and Implementation

Washington & Lee Law Review, Vol. 58, 2001

U San Diego Law & Econ Research Paper No. 16

37 Pages Posted: 29 Aug 2001 Last revised: 12 Sep 2015

See all articles by Karen C. Burke

Karen C. Burke

University of Florida Levin College of Law

Grayson M.P. McCouch

University of Florida Levin College of Law

Date Written: 2001

Abstract

This article considers administrative issues that bear on the structure and implementation of any universal, mandatory system of personal accounts within the Social Security system. The central issues involve tradeoffs between relatively standardized, low-cost options with constrained individual choice and limited risk, on the one hand, and more flexible, higher-cost options with enhanced opportunities for individual control and greater risk, on the other hand. A centralized system modeled on the Thrift Savings Plan for federal employees could balance these goals by offering participants a relatively narrow range of investment and withdrawal options, with correspondingly low administrative costs and limited risks. Alternatively, a decentralized system could offer a broader range of options, coupled with higher costs and greater risks. Ultimately, the choice between these approaches reflects controversial judgments about values and politics. It is imperative that the inevitable tradeoffs be carefully considered at the outset and not left to be resolved at some indefinite future time. It is also important to understand that the federal government would undoubtedly have a substantial and continuing role even in a privatized Social Security system.

Keywords: social security, privatization, investment, administrative, women, minorities, low income, budget

JEL Classification: K34

Suggested Citation

Burke, Karen C. and McCouch, Grayson M.P., Privatizing Social Security: Administration and Implementation (2001). Washington & Lee Law Review, Vol. 58, 2001, U San Diego Law & Econ Research Paper No. 16, Available at SSRN: https://ssrn.com/abstract=281669 or http://dx.doi.org/10.2139/ssrn.281669

Karen C. Burke (Contact Author)

University of Florida Levin College of Law ( email )

P.O. Box 117625
Gainesville, FL 32611-7625
United States

Grayson M.P. McCouch

University of Florida Levin College of Law ( email )

P.O. Box 117625
Gainesville, FL 32611-7625
United States

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