Social Security Bonds and the Concept of Reciprocal Responsibility

Abstract

Listen

Translate article

AbstractThe current debate and parallel monologues about Social Security suffer from a failure to distinguish between money and bonds. Consequently, it is impossible to discuss intelligently the solvency or affordability of the Social Security system. In this article, we present a new graph that clarifies this crucial distinction. Bonds are evidence of loans to be repaid on a schedule. These loans can be strictly monetary, as in the private sector, or a mix of monetary and moral, as in the intergenerational reciprocity of obligations. To treat public sector bonds as strictly monetary is economic error as fundamental as denying the existence of public goods.