Alicia H. Munnell worries about the social security system. But not about its financial soundness. Ms. Munnell, director of research at the Federal Reserve Bank of Boston, wonders whether the national pension program will pile up too much riches in the next 35 years before the ''baby-boom generation'' retires.
Many, after hearing about the threat of bankruptcy to the system for so many years, may not realize that Congress mended it financially - indeed with a vengeance - through 1983 changes in the law.
The basic idea was to accumulate some reserves in the 1990-to-2020 period, when those relatively few born in the 1930s and '40s will have their pensions financed by abundant working baby-boomers. Then, when these offspring of the 1960s and '70s retire, those reserves would be drawn down to help pay their pensions. This would ensure the financial ability of the system to live up to its pension promises for at least 75 years.
Already the social security fund has a surplus. It is running $2 billion to $ 3 billion in the black this year, probably around $9 billion next year, and it could reach annual surpluses as high as $1 trillion (in inflated dollars) eventually, says Munnell.
By about 2020, the fund should have reserves equivalent to about 30 percent of gross national product, the total output of goods and services. In 1984 terms , with GNP expected to run about $3.5 trillion, 30 percent reserves would be roughly $1 trillion. Such a surplus would be some 5.7 times the federal deficit of fiscal 1984.
What concerns Ms. Munnell and a research department colleague, Lynn E. Blais, is that this buildup in social security reserves actually means shifting consumption from today's relatively poorer generation to tomorrow's relatively more affluent generation.
This assumes that living standards will continue to rise over the next decades. In fact, soundness of the social security system depends on real wages (after subtracting inflation) rising on average 1.5 percent per year. Since the social security system gets its revenues from taxes on wages, the rise in real wages is important.
The two economists, writing in their bank's bimonthly publication, the New England Economic Review, conclude it would be preferable for the system to return to pay-as-you-go financing. The system would maintain a relatively small buffer fund of somewhere between 85 and 145 percent of annual outlays to tide the system over a severe recession. But basically tax revenues in one year would finance benefits paid in that year.
Ms. Munnell and Ms. Blais see other pros and cons in the buildup of massive reserves, as now planned.
On the positive side, the pileup of balances could increase net national savings over the next 35 years. That money would presumably lower interest rates and provide extra capital for business to modernize.
On the negative side, the social security fund would be so enormous that ''it would be forced to buy virtually all the US government debt held by the public.'' This would alter the character of the Federal Reserve System's ''open-market operations'' - the buying and selling of government securities in order to control the money supply.
Still, the two Fed economists see no need for immediate change in the system. ''It makes sense to wait until the late 1980s to see whether the assumptions underlying the scheduled buildup still seem realistic,'' they write. The economy could be weaker than anticipated. Or Congress could use the extra money to finance the medical side of the social security system, which does face a crisis.