Word: feldstein
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...Feldstein's argument was that individuals' expectations of receiving social security benefits cause them to reduce their personal savings by around 50 cents for each dollar of social security benefits they expect to receive...
Private savings accumulate in banks and provide funds, or capital, for investment and economic growth; future benefits do not. As a result, Feldstein has estimated--first in a 1974 paper--that social security had reduced the accumulated wealth of the nation by as much as 38 percent...
...Feldstein told students in his December 14 lecture that future social security benefits act as a "clear and direct substitute for private saving" and that the magnitude of this substitution is an "empirical question...
...Feldstein said of the 50 cent drop in personal savings supposedly caused by social security: "It is a number that I think is in line with the statistical evidence...
...number of economists are not so sure, and Feldstein has spent more than a decade defending what critics have called an unjustified conclusion from faulty evidence...