  Social Security and other public policies can be viewed as a series of cash
in and outflows that depend on parameters such as the age distribution of the
population and the retirement age. Given forecasts of these parameters,
policies can be designed to be financially stable, i.e., to terminate with a
zero balance. If reality deviates from the forecasts, policies normally
terminate with a surplus or a deficit. We derive constraints on the cash flows
of robust policies that terminate with zero balance even in the presence of
forecasting errors. Social Security and most similar policies are not robust.
We show that non-trivial robust policies exist and provide a recipe for
constructing robust extensions of non-robust policies. An example illustrates
our results.
