SOCIAL-SECURITY AND THE PUBLIC DEBT

The U.S. social security program is expected to have surpluses averaging .6% of GNP for the next twenty-five years, followed by deficits that reach 1.7% of GNP. When the health care part of the program is added, surpluses average .5% of GNP for eighteen years, followed by deficits that rise to 4% of GNP. The deficits may seriously affect future U.S. debt policy. This paper examines long-run debt/income ratios under alternative Federal budget scenarios and recent social security projections. With exceptional fiscal restraint, net asset positions arise during surplus years. During deficit years, large and possibly unstable debt ratios emerge.