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A New Deal for Social Security (Hardback)


By Peter J. Ferrara and Michael Tanner

How to reform Social Security and end the looming crisis.

About the Book
For six decades Americans have relied on Social Security for retirement income. Now, that venerable program is facing a profound crisis. In just a few short years, Social Security will begin to run a deficit and will be unable to provide promised benefits without an enormous tax increase on young workers. The program's rate of return has been steadily declining, which will leave future generations with the prospect of actually losing money on the system -- getting back less in benefits than they pay in taxes.

This book traces Social Security from its inception to its current crisis, showing that the program's problems are the result of a fundamental flaw in its design. Social Security taxes are not saved or invested in any way. Instead, taxes paid by today's workers are used to pay benefits to today's retirees. Workers have to hope that when they retire another generation of workers will pay the taxes to provide their benefits. Like any pyramid scheme, this system cannot be sustained in the face of changing demographics.

Ferrara and Tanner offer an alternative -- a retirement system based on saving and investment. They propose allowing individuals to divert their Social Security taxes to individually owned, privately invested accounts, similar to IRAs or 401(k) plans. Answering the hard, practical questions about privatizing Social Security, the authors show how such a plan would provide higher and more secure retirement benefits without increasing taxes or penalizing today's retirees.

As the debate over Social Security's future heats up, this book will be vital reading for anyone interested in ensuring that future generations enjoy dignified, secure retirement.
About the Authors
Peter J. Ferrara is general counsel and chief economist for Americans for Tax Reform and an associate policy analyst for the Cato Institute. Michael Tanner is director of the Cato Institute's Project on Social Security Choice.
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What Others Have Said
"An excellent analysis of how we slid into the looming crisis of bankruptcy facing our social security system. One quickly realizes that redesign of the system is imperative, and inclusion of private and personal savings accounts is the only avenue to achieve security in our retirement years. This book is a must read for all baby boomers."
--Dorcas R. Hardy, Former Social Security Commissioner

"When one looks for experts on Social Security, the names of Michael Tanner and Peter Ferrara immediately come to mind. These two have combined their talents in producing a book interesting and informative for all on the need to preserve Social Security by putting it on a sounder, more secure basis. I recommend this book with enthusiasm."
--Sen. Sam Brownback (R-Kans.)