It would be a great way for people to leave an inheritence for their families (Tanner, "Saving Social Security is Not Enough"). A feeling of frustration is often felt when people [not receiving social security] obtain their paychecks and a large part of their money goes to social security. If they are of certain age, they will never see this money, as the Social Security system in its present form will be bankrupt. The only way to save the Social Security System is a tax increase. In 1998, a general tax increase of 2.2 percent was planned out to aid in social security (Howe).
Taking the time to plan and save for retirement can mean the difference between a poor standard of living and a standard of living to which individuals are accustomed. When individuals save for their own retirement, the government does not control how and when that money is spent, and the individual makes decisions regarding how much money he or she wishes to place in any particular investment vehicle. Simply stated, there are far more benefits in saving for retirement individually than there are in allowing the United States Government to hold all of the retirement funds. For years citizens, politicians, economists, and journalists have been debating whether or not Social Security is sustainable. Many people argue Social Security is in crisis and in need of major reform, but others say no crisis exists (Biggs, 2001).
Recommendations On average the United States spends $529 billion on foreign affairs that will never be able to return the money to the US government. Thus, it falls into the lost money category. If the government were to stop sending meaningless money in outlying areas that have no capital to return, the debt will be greatly reduced. Many of the solutions stated above are possible, but it is our recommendation that the U.S. government stop spending money overseas first. The country may still need to look into other solutions afterwards, but we believe this is a crucial first step to reducing the national deficit.
Because in the United States, the top one percent earner’s income totaled 21% of the entire country’s pre-tax income (Piketty), I decided that America’s top earners would have to suffer the lion’s share of tax increases. I attribute this decision to the fact that many lower and middle class workers struggle to make a living, while upper class earners with much more disposable income do not have much higher tax rates. Corporations, many of which utilize tax credits and loopholes to pay very little in tax, are also looked at, as tax increases for corporations do not directly translate into lower wages for workers. I also kept an eye on the future, funding programs that would help future generations prosper, as the long term consequences of decisions have the greatest impact. I expected to be able to cut quite a bit from the budget, but feared that I would fund too many social programs and therefore not save enough money.
However, over time the Republicans learned that it's popularity with the voters has made this issue untouchable. According to Congressman Richard Gephardt, the social security was not meant to be the sole source of retirement income but rather as a foundation for retirement to give all working Americans a safety cushion. There will be money in the fund until 2029, so distressing baby boomers don’t have to worry. After that money is depleted the revenue from the payroll tax will be sufficient enough to pay 75% of every social security benefit for the subsequent 75 years. But how many burdens should be put on the young and middle age individuals, whose taxes basically pay for government retirement ... ... middle of paper ... ...s for generations to come, which in essence, needs to start now.
Paul W. Boltz, economist for the T. Rowe Price mutual fund said, "When we examine the pending financial crisis of our Social Security system, we find, in effect, the characteristics of a government sponsored Ponzi-type scheme." Michael H. Cosgrove, of the Dallas-based newsletter, The Econoclast says, "People need to take the responsibility of investing their own funds for their retirement. The Social Security system assumes people can't make that decision and government can do it better. The result is a bankrupt Social Security System." These economists believe that by investing ... ... middle of paper ... ...oss would have to be made up either by hiking taxes, increasing borrowing or drastically cutting benefits to current retirees.
Some argue that personal retirement accounts would be a mistake and that the government instead should set up its own investment fund to help finance future benefit payments. The good news is that this indicates a growing awareness that ¡°pre-funding¡± (i.e., accumulating assets) is a necessary component of Social Security reform. The bad news, however, is that government-controlled investment is the wrong answer to the wrong question. It assumes that policymakers should focus solely on balancing the program¡¯s revenues and expenditures. This ignores the other Social Security crisis¡ªthe fact that the tax burden on today¡¯s workers is extraordinarily high compared to the benefits received (often referred to as the rate-of-return crisis).
The reason there will not be a raise is because “the Republican minority in the U.S. Senate filibustered and blocked a vote on a House-passed bill that would give workers a $2.10-an-hour raise over two years” (Addison 2). There would have been no strings attached to businesses if this bill would have been passed resulting in no downfalls for businesses, the only major consequence would have been a decrease in the number of citizens living at or below the poverty line. If the Federal Government was to approve the wage increase the income gap would decrease drastically. Many people complain about the inequality between the rich and poor, but the Federal Government is able to decrease the number of people living in poverty instantly b... ... middle of paper ... ...the poverty line will have to wait an even longer time to rise above their deprivation. Additionally, if the government took the time to establish a solid public education for all students and encouraged high school students to attend college the gap would also see positive changes.
Although some think the Auto Bailout didn’t help small supplier companies, it was the right move for the government to take because it helped stop our economy from going further into a depression. The Auto Bailout started in 2008 after the Great Recession occurred in 2007. Its purpose was to loan money to GM and Chrysler to keep them from shutting down. If the car companies went bankrupt, the supplier companies would also go bankrupt and many citizens would lose their jobs. Giving loans to them would increase economic activity and help bring the US out of the Great Recession.
It is important to analysis and learn from previous monetary policies in America. A significant rise in wages did not achieve the goal of reducing poverty. Therefore, raising the minimum wage in the remaining states would likely produce no significant reduction of poverty. Furthermore, increasing the minimum wage will shift the financial burden from business owner to customers through higher prices. Over 500 economists from institutions and universities across America signed a letter to President Obama in warning when they stated, “business owners...will need to cut costs, or pass the increase to their consumers in order to make ... ... middle of paper ... ...s. U.S. News & World Report, 11 Mar 2013.