Social Security in the United States: Overview and Outlook

Includes bibliographyThis document was prepared by Helvia Velloso, consultant of the United Nations Economic Commission for Latin America and the Caribbean, ECLAC, Washington Office. Prepared as a support to the document "Shaping the Future of Social Protection: Access, Financing and Solidarity" presented in the XXXI ECLAC Session Period carried out in Montevideo, Uruguay during March, 20 to 24, 2006. The views expressed in this document, which has been reproduced without formal editing, are those of the authors and do not necessarily reflect the views of the Organization. Introduction In response to the challenges posed by an aging population, countries all over the world are currently considering, or may have already enacted, fundamental structural reforms of their Social Security Pension programs. Demographic trends and other pressures on these programs are expected to increase sharply in coming decades. In particular, the looming retirement of the babyboom generation, declines in fertility rates, and increases in longevity are projected to cause a significant increase in the old-age dependency ratio: the ratio of retirees to the working-age population. Social Security is considered one of the United States' most successful government programs. Despite its success in helping millions of senior Americans avoid poverty, it faces a long-term deficit and policymakers have been considering changes to address these problems. The Trustees of the Social Security and Medicare systems (programs including age-related social expenditures); continue to stress the actuarial deficits of both systems in face of the imminent retirement of the baby-boom generation and pressures on health care costs. Moreover, the erosion of the U.S. fiscal situation since 2001 (when projections were for large surpluses and the elimination of public debt by 2009); and the re-emergence of budget deficits have revived concerns regarding the impact of these demographic trends on the longer-term fiscal position. This paper describes the Social Security system in the United States, discusses the state of the program today and the challenges ahead. Part I is an overview of the federal programs that are part of the social security system and provide support for the elderly, as well as of employersponsored and private pension plans. Part II discusses the system's balance between fairness, efficiency and sustainability, as well as income and retirement trends. Part III discusses reform proposals, and the last section offers some concluding remarks

Sovereign credit ratings in Latin America and the Caribbean: history and impact on bond spreads

In this study, we examine the history of sovereign credit ratings in Latin America and the Caribbean, the evolution of credit quality, and the relationship between rating changes and the cost of accessing external financing as reflected in the behavior of sovereign bond spreads. We apply an event study to estimate the impact of credit rating changes on sovereign bond spreads in the past fifteen years. We find that the impact is asymmetric (with a larger impact for downgrades) and is sensitive to both spatial and temporal clustering. The results suggest that the quality of sovereign credit is important in determining the cost of access to private external financing

Las tasas de interés estadounidenses, la deuda latinoamericana y el contagio financiero

Incluye BibliografíaEste artículo examina de qué manera los títulos de deuda latinoamericanos se vieron afectados,en el comportamiento de sus márgenes, por las variaciones de las tasas de interés estadounidenses en la segunda mitad del decenio de 1990. El análisis empírico muestra que,contrariamente a lo que sugiere el marco teórico, en este período los márgenes (spreads);de los bonos de los mercados emergentes y las tasas de interés estadounidenses se movieron en direcciones opuestas;sugiere que hubo contagio financiero; apoya la tesis de que la contracción de la liquidez y el contagio financiero pueden contrarrestar el efecto de esas tasas de interés sobre los márgenes de los bonos de mercados emergentes en épocas de turbulencia económica y financiera,transformándose así en los factores de más peso en la evolución de esos márgenes;y corrobora que la mayor integración financiera que caracteriza al proceso de globalización actual ha acrecentado la vulnerabilidad de las economías en desarrollo a las perturbaciones externas

Towards a new industrial policy: The United States economic policy agenda post-COVID-19

This document examines the United States economic policy agenda proposed by President Joe Biden following his inauguration in January 2021, the discussions in the United States Congress since then, and the resulting legislations that have been signed into law. It also details government efforts to address supply chain bottlenecks and legislative efforts to pass a unified bill on increasing innovation and strengthening competitiveness. Four major legislations –the American Rescue Plan Act, the Infrastructure Investment and Jobs Act, the CHIPS and Science Act, and the Inflation Reduction Act– were signed into law as a result. The last three together suggest that the United States government appears to be moving towards a new industrial policy, focused on semiconductors and defense technology, and on clean energy.Abstract .-- Introduction .-- I. President Biden’s Build Back Better Agenda .-- II. Addressing supply chain bottlenecks .-- III. Investing in innovation and competitiveness

The Canadian retirement income system

Includes bibliographyThis document was prepared by Inés Bustillo, Helvia Velloso and François Y. Vezina, consultants of the United Nations Economic Commission for Latin America and the Caribbean, ECLAC, Washington Office. Prepared as a support to the document Shaping the Future of Social Protection: Access, Financing and Solidarity" presented in the XXXI ECLAC Session Period carried out in Montevideo, Uruguay during March, 20 to 24, 2006. The views expressed in this document, which has been reproduced without formal editing, are those of the authors and do not necessarily reflect the views of the Organization. Introduction The Canadian retirement income system (RIS) is generally considered a success story. Since 1971, senior citizens have experienced a significant improvement in their relative incomes, and an impressive number of seniors has moved out of poverty. The system provides most elderly Canadians at the low-to-middle income level with the means to largely preserve their living standards in retirement. At the same time, middle -to-high income households have an incentive to save for retirement because public pension benefits remain relatively modest. The reforms that have been implemented since the late 1990s have rendered the system viable in the long-run. They include a gradual increase in contributions (to a "steady-state" level) and in the amount of earnings subject to premium payments, changes in the administration and calculation of benefits, and the creation of an investment board to invest funds not immediately needed for benefits. However, the retirement of the baby boom generation, starting at the end of this decade, raises new challenges. The old-age dependency ratio is expected to rise sharply (Chart 1), and the RIS will have to cope with these new demographic trends. Although the adjustments to the RIS and the economic recovery of the late 1990s restored the financial health of the RIS, there is still scope for additional reforms in preparation for the retirement of the baby boom generation.

Debt financing rollercoaster: Latin American and Caribbean access to international bond markets since the debt crisis, 1982-2012

Includes bibliographyForeword by Alicia Bárcena.This report examines how the access of Latin American and Caribbean countries to external debt financing has evolved in the three decades since the debt crisis of 1982. In these thirty years, as the global financial environment evolved and structural shifts took place in the region, the market for Latin American and Caribbean tradable debt opened, deepened and broadened, developing from an unsecuritized loan market in the 1980s to a robust and improved securitized bond market by the end of the period. The study highlights how bond financing today is very different from what it was in the 1980s and 1990s and how access to external bond financing has become more widespread and less costly. Through the analysis of the forces behind the evolution of spreads, issuance and credit ratings, the report shows that by the end of 2012, debt spreads had declined considerably from the high levels prevalent in the late 1990s and early 2000s; the composition of debt issuance had shifted from sovereigns to the corporate sector and to local markets; debt was issued on a broader range of currencies; credit quality had improved substantially; and Latin American and Caribbean external debt attracted a larger and more diversified investor base. From 1982 to 2012, several countries in the region moved from facing a shortage of funds to learning how best to manage available financing options. Access to external debt financing is not universal, however, and despite increased resilience, vulnerability to external financial shocks can still be a threat.I. The origins of the asset class: the debt crisis of the 1980s .-- II. Brady bonds .-- III. Emerging market tradable debt: the maturing of the asset class .-- IV. Developments in new debt issuance .-- V. Debt spreads rollercoaster: evolution and performance .-- VI. The long road to improved credit quality .-- VII. Unequal access: a closer look at Central America and the Caribbean .-- VIII. Looking ahead: are emerging and developed debt markets converging

The global financial crisis: what happened and what’s next

Global economic conditions have been deteriorating sharply since mid- September 2008. Lending has dropped abruptly, credit spreads have widened sharply, stock markets have plunged and economies everywhere are stumbling. Governments around the world have undertaken unprecedented measures, including some coordinated intervention. However, global economic prospects remain troubled, and further policy action is required. In order to better understand the task before policy makers as they chart a new direction, this paper examines how the global economy arrived at its current predicament, looking back at the sequence of events that contributed to create havoc in financial markets, as well as the policy response they produced. In light of these events, we examine the impact on Latin American financial markets in particular. The global nature of the current crisis underscores the need for coordinating the policy response at the global level, as well as advancing towards a new international financial architecture that will make possible a more effective response to the build-up of systemic pressures

Puerto Rico: Fiscal and economic growth challenges

The objective of this paper is to assess the challenges that Puerto Rico’s economy is currently facing. Puerto Rico’s development experience in the postwar period is briefly discussed in order to understand the nature of the island’s current situation. Puerto Rico’s recent economic performance, credit position, debt situation and fiscal conditions, including its complex capital structure and recently released fiscal and economic growth plan are also analyzed.Abstract .-- Introduction .-- I. Development experience in the postwar period .-- II. Recent economic performance .-- III. Puerto Rico’s credit position .-- IV. Fiscal conditions and debt situation .-- V. Looking ahea

Access to international capital markets: recent developments in Central America and the Caribbean

The objective of this report is to analyze the impact of recent global financial trends on the access to private external financing by Central American and Caribbean (CAC) economies, as well as their performance in international capital markets in recent years. The CAC economies, like many other countries in the world, were not immune to the negative consequences of the global economic and financial crisis of 2008. In fact, their openness, export driven growth and linkages to advanced economies, particularly to the U.S., as well as size, made them more vulnerable than other Latin American countries to the negative effects of the crisis. In addition, their recovery was hindered by their weak linkages to the larger emerging market countries that drove global growth in the post-crisis recovery. As China and other emerging market economies begin to slowdown, however, and the U.S. and other advanced economies show signs of a strengthening recovery, the linkages to advanced economies may once again become a source of strength