Templin: Comment on Buchanan's Social Security and Government Deficits: When Should We Worry?

Benjamin Templin (Thomas Jefferson) has posted Comment on Neil H. Buchanan's Social Security and Government Deficits: When Should We Worry?, 92 Cornell L. Rev. 291 (2007), on SSRN.  Here is the abstract:

(This comment responds to Neil H. Buchanan, Social Security and Government Deficits: When Should We Worry?, 92 Cornell L. Rev. 257 (2007). Professor Buchanan is not alone in questioning whether a Social Security funding crisis actually exists. Despite widely accepted predictions by the Social Security Administration, there is a small but growing cadre of respected scholars who are rightly skeptical of actuarial figures geared to motivate policymakers toward a certain political agenda. However, even if Professor Buchanan and others are correct that there is no funding crisis, does that preclude prudent policymakers from applying sound money management principles to invest the Social Security Trust Fund in higher-performing assets? Professor Buchanan prefers to maintain the status quo with regard to structural changes in Social Security financing, though he suggests that a more progressive Federal Insurance Contributions Act (FICA) tax would fulfill distributive justice objectives. These objectives are legitimate, but policymakers should couple any such strategy with a rethinking of how we invest the Social Security Trust Fund. The 1983 amendments to the Social Security Act, which created the current Trust Fund, transformed Social Security's financing from a purely nonfunded system to a partially funded system. If Professor Buchanan is right about the funding needs of Social Security, then an opportunity exists through prudent investment to move to a fully funded system without painful tax hikes or benefit cuts.