In evaluating our social insurance system, therefore, we first need to address the three basic economic questions posed above. Implicit in this exercise, of course, is consideration of the extent to which our citizens should have freedom of choice instead of having their activities limited and regulated. Having answered these questions and thus having determined our objectives, we would then ascertain whether the present social insurance system is consistent with those objectives and, if not, how it should be changed. If we performed this analytical exercise, we would probably conclude that the retirement age patterns fostered by the present social insurance system won't give us a large enough work force in the early 21st century to produce all the goods and services our citizens will want. We would probably conclude that the nation's average retirement age should increase from the early 60s to the late 60s or early 70s within the next 10 to 20 years.
Social insurance plays an obvious role in satisfying the population's economic security needs.
At the same time, it's a reflection of our nation's existing social and economic structure. We must also keep in mind that the government doesn't pay for social insurance. Social insurance is simply an agreement among the citizens that one segment of the population will receive certain benefits and another segment of the population will pay for such benefits. The government is simply the intermediary that carries out the wishes of the people. The government does, however, define the nature and extent of the future benefits to be paid and thus the nature of the guarantee burden imposed upon future taxpayers.