Should Subsidized Private Transfers Replace Government Social Insurance?

Should Subsidized Private Transfers Replace Government Social Insurance Until recently reforming government social insurance was considered virtually unthinkable in most industrialized nations But several developments have combined to make this not only possible but like

  • Title: Should Subsidized Private Transfers Replace Government Social Insurance?
  • Author: Ralph Chami
  • ISBN: 9786613802880
  • Page: 274
  • Format: ebook
  • Until recently, reforming government social insurance was considered virtually unthinkable in most industrialized nations But several developments have combined to make this not only possible but likely First, the rising costs of social insurance programs have recently contributed to fiscal problems in most industrialized nations For example, many EU members had difficuUntil recently, reforming government social insurance was considered virtually unthinkable in most industrialized nations But several developments have combined to make this not only possible but likely First, the rising costs of social insurance programs have recently contributed to fiscal problems in most industrialized nations For example, many EU members had difficulty meeting the requirements for European Monetary Union EMU because their debt GDP ratios, which included borrowing to finance social insurance programs, exceeded the allowable limits2 In a similar vein, Tanzi 2000 argues that globalization is reducing government s ability to maintain tax funding for social insurance spending A second development is the increased recognition by the general public of the indirect costs of government social insurance, which include distorted work incentives that lead to high and persistent unemployment Finally, efforts to reduce government involvement in other areas of the economy have generally lead to faster economic growth, lower prices, and better quality of goods and services in the deregulated industries This suggests that reforming government social insurance could lead to similar improvements in service.

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