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Executive Summary

Chapter 1 - Introduction and Summary

• The Challenges of an Aging Population
• Issues to Consider in Reforming Social Security
• Strategies for Preparing the Nation
• Save Budget Surpluses
• Create Private Accounts
• Make Programmatic Changes

Chapter 2 - An Overview of the Social Security Program

• Social Security's Objectives
• The Original Program
• Later Developments
• Related Federal Programs
• How Social Security Works
• Rules for Determining Retirement and Disability Benefits
• Rules for Determining Family Benefits
• Financing and the Trust Funds

Chapter 3 - The Challenges of an Aging Population

• The Demographic Outlook
• The Outlook for Incomes
• Higher Productivity Results in Higher Average Income
• Some Elderly People Might Not Share in the Income Gains
• The Budgetary and Economic Perspective
• The Social Security Trust Fund Perspective

Chapter 4 - Strategies for Preparing for an Aging Population

• Preserving Budget Surpluses
• The Mechanics of Federal Budget Surpluses
• The Economic Effects of Saving Surpluses
• Government Accumulation of Assets
• Economic Efficiency
• Creating Private Retirement Accounts
• The Basic Structure of a Privatization Plan
• The Effects on National Saving
• The Effects on the Labor Market
• Administrative Costs
• Risks and Guarantees
• Annuities
• Other Considerations
• Changing the Rules of the Current Social Security System
• Reducing Benefits
• The Effects of Raising Payroll Taxes

Appendix A - The Economic Effects of Having the Government Issue Debt to Finance Investments in the Stock Market

Appendix B - Proposals for Private Accounts in the 106th Congress

Appendix C - Contributors to the Primer
 

TABLES
1.	Projected Federal Spending for Social Security, Medicare, and Medicaid in 2001
2.	Asset Holdings of Retirement Funds for State and Local Government Employees
3.	Families' Direct and Indirect Holdings of Stock, by Type of Family
4.	The Payroll Tax Base for Social Security and Average Wages in Selected Years, 1951-1998
FIGURES
1.	Projected Growth in the Adult Population, 2001-2075
2.	Projected Federal Spending for Social Security, Medicare, and Medicaid, 2000-2030
3.	Distribution of Social Security Beneficiaries, by Type of Benefit Received, December 2000
4.	The Extent to Which Social Security Replaces Workers' Preretirement Earnings
5.	Income, Outlays, and Balances of the Social Security Trust Funds, 2001-2037
6.	The Outlook for Social Security Demographics and Spending, 2001-2075
7.	Births in the United States, 1909-2075
8.	Key Demographic Indicators for Social Security, 1940-2075
9.	Labor Productivity in the Nonfarm Business Sector, 1951-2000
10.	Sources of Family Income for People Age 65 or Older, 1999
11.	Poverty Rates for Different Age Groups, 1966-1999
12.	Marital Status of the Female Population Age 65 or Older, 2000 and 2030
13.	Federal Debt Held by the Public as a Percentage of GNP, 1790-2000
14.	Real Income per Person Under Different Assumptions About Saving Surpluses
15.	Number of Active Participants in Private Pension Plans, 1977-1997
16.	How the Year of Retirement Affects Income-Replacement Rates in a System of Private Accounts Invested in Stocks or Bonds
17.	The Probability of Retirement for Men at Various Ages in Different Years
18.	The Payroll Tax Rate for Social Security, 1937-2000
BOXES
1.	Recent Statistics About Social Security
2.	Prefunding Future Consumption
3.	Will Workers in the Future Retire Later?
4.	The Budgetary Treatment of Government Purchases of Private Securities
5.	The Impact on Financial Markets of Paying Down Federal Debt
6.	The Risks and Returns of Stocks
7.	Why Comparing Rates of Return Can Be Misleading
8.	Who Would Bear the Transition Costs of Privatizing Social Security?

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