Ignoring Social Security Paints False Wealth Inequality Picture
Inequality remains a fiercely debated subject among economists and academics who seek to answer the question– does it matter? The CATO Institute is out with an academic study that concludes “that studies estimating wealth inequality without accounting for Social Security would both exaggerate the level of inequality and overestimate its increases since the 1980s.” The authors find that Social Security actively crowds out private saving among those on modest incomes. It also widens marketable wealth inequality. They go on, “Perversely, critics of current levels of marketable wealth inequality then use these calculations ignoring Social Security as justification for increasing the generosity of transfer programs such as Social Security, that would widen their preferred wealth inequality metrics further. Read the full article by Ryan Bourne (who did the study with Chris Edwards) here.