The Political Economy of Private Saving in the U.S.

About the Book

Using theoretical and empirical approaches from the economics and political science disciplines, this book examines the social opportunity costs of American public policy towards national saving. The primary focus of the text is on the institutional arrangements of the U.S. Social Security system, as they relate to Americans' decisions to save and invest, and to interest groups' decisions to lobby Congress for political privileges. The book presents statistical evidence suggesting that the social opportunity costs of U.S. policy in this area are enormous. Lower bound estimates put the loss in private savings, due to savers' decisions to substitute Social Security for private retirement plans, at approximately $349 billion dollars annually. When the lobbying costs associated with efforts to redistribute the money in the Social Security Trust Fund are included, this figure rises by perhaps as much as $15 billion. The results and discussion in this work should serve as a useful addition to the policy debates in this area.

About the Author

Franklin G. Mixon, Jr. is the Business Advisory Council Professor of Economics at The University of Southern Mississippi. He received his PhD in economics from Auburn University in 1992. His research interests include the economic modeling of the political process, and industrial organization. His work has been published in numerous scholarly journals, with recent pieces being published by Economics of Governance, Journal of Money, Credit, and Banking, Public Choice, and Economic Inquiry.

Kamal P. Upadhyaya is an Associate Professor of Economics at the University of New Haven. He received his PhD in economics from Auburn University in 1993. His work has recently been published by Economic Inquiry, Public Choice, Journal of Development Studies, Economics Letters, and the International Trade Journal.