Chapter

Liberal Proposal 2 By Peter A. Diamond and Peter R. Orszag

Jagadeesh Gokhale

in Social Security

Published by University of Chicago Press

Published in print April 2010 | ISBN: 9780226300337
Published online February 2013 | e-ISBN: 9780226300368 | DOI: http://dx.doi.org/10.7208/chicago/9780226300368.003.0009
Liberal Proposal 2 By Peter A. Diamond and Peter R. Orszag

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Peter A. Diamond and Peter R. Orszag, are both prominent and highly respected economists. Both have made wide-ranging contributions in the areas of fiscal policy and social insurance including to the Social Security reform debate. The two economists collaborated to produce a detailed Social Security reform proposal in the year 2003. They explicitly acknowledge that the program faces long-term financial shortfalls and that a resolution of its future financial problems would be easier if actions are taken earlier rather than later. This is unlike many on the political left who continue to deny or ignore Social Security's structural financial imbalance. They believe that changes in socioeconomic conditions since the last major Social Security reforms in 1983 have made many of the program's features obsolete and in need of adaptation. The liberal approach is rooted in preserving the “guaranteed” status of a base level of Social Security benefits—a principle that the Diamond-Orszag plan largely adheres to. They promote their approach as a balanced division of adjustment costs between tax increases and benefit reductions.

Keywords: Peter A. Diamond; Peter R. Orszag; Social Security; reform debate; proposal; economists

Chapter.  7608 words.  Illustrated.

Subjects: Public Economics

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