Mark to market for Social Security?

Why not, I say?

Implicit government obligations represent the lion’s share of
government liabilities in the U.S. and many other countries. Yet these
liabilities are rarely measured, let alone properly adjusted for their
risk. This paper shows, by example, how modern asset pricing can be
used to value implicit fiscal debts taking into account their risk
properties. The example is the U.S. Social Security System’s net
liability to working-age Americans. Marking this debt to market makes a
big difference; its market value is 23 percent larger than the Social
Security trustees’ valuation method suggests.

Here is the paper, by Alexander W. Blocker, Laurence J. Kotlikoff, and Stephen A. Ross.  Here is an ungated version.  Do note that a worsening crisis will increase the magnitude of this difference.


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