Transition is needed now – private accounts is key for funding equality
Saving and Rettenmaier 05 - (Andrew J. Rettenmaier is from Texas A&M University and part of Private Enterprise Research Center and Thomas R. Saving from Texas A&M University and studies Department of Economics, Ph.D. University of Chicag) PhD January 2005, "(PDF) Private Accounts as a Solution to Social Security Debt," ResearchGate, https://www.researchgate.net/publication/268055439_Private_Accounts_as_a_Solution_to_Social_Security_Debt //mish
From the comparison in the last section of the CGUOs of the current insolvent system and a solvent one, one can see that a Social Security reform would also have implications for intergenerational equity. A reform featuring private accounts would force policy makers to deal with the financing shortfall directly. If we do nothing, current generations will pay taxes and receive benefits according to the current overly generous tax rate and benefit schedule. As a result, future generations will have to pick up the $12.7 trillion left by current generations. On the other hand, if the financing shortfall is eliminated by a reform, essentially through tax increases, current generations will contribute to the servicing of the $12.7 trillion debt. Indeed, from the previous example, what is left for future generations to pick up is reduced to $5.14 trillion. In general, any transition to a prepaid private account retirement system would have intergenerational redistribution in favor of future generations. Whether generational equity should be a goal of policy is an open question, although one that the proponents of reform have answered in the positive.