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The Chile Con
Privatizing Social Security in South America
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Stephen J. Kay,
The American Prospect,
7/1/1997
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As this brief description indicates, the Latin American social security systems suffered from financial and administrative problems that we in the United States can scarcely imagine, and their debates over privatization were informed by fundamentally different political and economic realities. Yet the private alternative displays serious flaws, and the rush to emulate it has slowed, even in Latin America. Ultimately, Argentina and Uruguay's governments divided political and market risks by passing privatization laws that preserved a strong public pillar. Given that our own Social Security system does not suffer the maladies that plagued those in South America, privatization is a risky strategy for resolving a tractable actuarial shortfall.
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