National Social Security expert speaks to business, political science students
By Janel Shoun on 2/28/2012
When it comes to Social Security reform, it is the youngest generation that should be the most concerned, as they will be the most affected, Andrew Biggs, an economist and resident scholar at the American Enterprise Institute in Washington D.C., told a gathering of Lipscomb University undergraduate students on Tuesday.
Biggs, who was once the principal deputy commissioner of the Social Security Administration (SSA) and worked on Social Security reform at the National Economic Council and on the staff of the President’s Commission to Strengthen Social Security in 2001, told the young crowd that while their age group was the least likely to vote and the least likely to be politically engaged, it was their generation that is and will be most affected by any potential changes (or status quo) of Social Security.
When the most expensive program in the federal government has the potential to go broke, “We must get on top of this problem,” Biggs told the students.
Biggs visited campus Tuesday to speak to political science students, business students and to record a podcast for the College of Business as part of the “Conversations with the Dean” series. As a nationally known expert on Social Security, his work has appeared in the Wall Street Journal, New York Times and Washington Post, and he has testified before Congress on numerous occasions.
Instead of making small tweaks over many years to try and make Social Security solvent again, politicians and policy makers should be asking themselves: “What if we re-invented Social Security? What is it we want this program to do? And what does that look like in the future?”
America needs a Social Security program for 2035, not 1935 when it was established, he said. In the 1930’s, families were large and life spans were short. It is exactly the opposite today, and changing demographics has highlighted the problems with how Social Security is financed: as a transfer system that spends the money collected from the young generation today to pay the benefits for the retired generation today.
The worker-to-retiree ratio has declined over the decades and will continue to decline, he said. Workers are now investing much more in their own financial safety net and living much longer than in the early days of Social Security.
Biggs suggested we take some sage advice from management guru Peter Drucker: “Would we choose to do this if we weren’t already doing it?”
Biggs, who indicated he has done work with both the Mitt Romney and Rick Santorum campaigns, suggested that Social Security should be reformed to require participants to save money by investing in mutual funds, and to then take the benefit money saved and devote it to an assistance program to help those retirees at the poverty level or below.