ABSTRACT
One mechanism available to help raise the low U.S. saving rate is the Social Security trust funds. Under current law, old-age, survivors and disability insurance (OASDI) receipts are projected to exceed outlays for the next thirty years, producing assets equal to nearly 30 percent of gross national product (GNP) by the year 2018. Although current law also provides that these accumulated reserves decline as a percentage of GNP between 2018 and 2046, proposals are already emerging in Congress to raise taxes to maintain the reserves once amassed. Hence, by accumulating assets in the Social Security trust funds, the federal government can create government saving and thereby contribute to higher levels of future output.
