Tuesday, March 27, 2012

Secunda on the Comparative Lack of Privatization in American Social Insurance Programs

SecundaPaul Secunda (Marquette) has just posted on SSRN his timely article Explaining the Lack of Non-Public Actors in the U.S. Public Social Insurance System.  Here's the abstract:

There are currently very few non-public actors playing a role in the federal and state social insurance programs in the United States. Yet, “projected long-run program costs for both Medicare and Social Security are not sustainable under currently scheduled financing, and will require legislative Bombcorrections if disruptive consequences for beneficiaries and taxpayers are to be avoided.” As financial pressure increases on these programs, as it surely will, Americans may become more willing to go the privatization route and engage more non-public actors in the provision of social insurance.

In the meantime, the paradox of the American social insurance system is that while disclaiming any desire for socialist-type programs, most Americans today believe that only the government should be responsible for providing the social insurance safety net. On the one hand, this could be because U.S. citizens are seeking to hold on to what meager social safety net they have left. On the other hand, scarred from the recent global recession and underhanded actions by many private investment firms and banks, most Americans are not yet ready to place their faith in these private actors, even if more efficiency, cost-savings, and activation could be achieved by doing so.

What this all means is that unlike its counterparts in Europe, the United States social insurance system does not appear to have an incipient movement in which non-public actors will start to play a larger role in any American social insurance program in the near future. At the same time, the stability of the current system means there is unlikely to be the same diminishment in solidarity that is sometimes seen with the introduction of non-public actors into these programs in other countries.

rb

http://lawprofessors.typepad.com/laborprof_blog/2012/03/secunda-on-future-of-medicare-social-security-financing.html

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Comments

Regarding unemployment compensation, not this particular topic:
I have an employee I fired for theft. Now Wisconsin has paid him unemployment benefits for termination. How is this appropriate public policy?

Posted by: Marty Greer | Mar 31, 2012 9:26:54 AM

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