At last, journalists are looking into Chile’s system of “privatization.” This NYT piece points out an important difference with the US case: “Chile was careful before it started its private system to accumulate several years of budget surpluses, in contrast to the recent large deficits in the United States.” Even so, “the transition period has turned out to be longer and more expensive than anticipated. The annual cost to the government, still the guarantor of last resort, has remained steady at 5 to 6 percent of the nation’s economic output” and “the government continues to direct billions of dollars to a safety net for those whose contributions were not large enough to ensure even a minimum pension approaching $140 a month.”
For more on the Chilean case, see Dale Steinreich: “Is Chile a Model.”
