Americas Social Security is running out! According to Social Security and Medicare Boards of Trustees “Projected long-run program costs for both Medicare and Social Security are not sustainable under currently scheduled financing, and will require legislative modifications if disruptive consequences for beneficiaries and taxpayers are to be avoided.” (Social Security Online). Other evidence shows “After 2022, trust fund assets will be redeemed in amounts that exceed interest earnings until trust fund reserves are exhausted in 2036, one year earlier than was projected last year.” (Social Security Online).
There are numerous causes and effects as to why Social Security is running out. First cause is Social Security is suffering from the weak economy. The effect this has is Social Security collects less in taxes than it pays out in benefits. A second cause is more people are relying on Social Security for income. This increased reliance in Social Security will affect recipient’s ability to live above the poverty line. Another cause is the federal government has borrowed all of the trust fund money and spent it. No money in the trust fund will affect federal government general revenues.
Social Security was originally signed into effect by Franklin D Roosevelt in 1935 (Social Security Online). The Social Security benefits include retirement income, disability income, Medicare and Medicaid, and death and survivorship benefits. Social Security is one of the largest government programs in the world, paying out hundreds of billions of dollars per year (Investopedia).
Analysis
The first cause of Security running out is that it is suffering from the weak economy and has been for several years, which is a slower recovery than the govern...
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Matthews, Merrill. What Happened to the $2.6 Trillion Social Security Trust Fund? 13 July 2011. 28 March 2012 .
Ohlemacher, Stephen. USA Today. 1 January 2011. 27 March 2012 .
Social Security Online. A SUMMARY OF THE 2011 ANNUAL REPORTS. 5 May 2011. 27 March 2012 .
—. HISTORY. 27 March 2012 .
The Fiscal Times Staff. Social Security Fund Could Run Out By 2017. 22 August 2011. 27 March 2012 .
There are millions of Americans affected by social security. These Americans rely on social security to provide them with financial security. Recently President Bush agreed to proposing a method of privatizing the social security program so that in the future the vast reserves of the social security system would not run out nearly as fast. With the always increasing rise in inflation, and the baby boomer generation reaching ages of retirement fairly soon, this is an issue that needs to be dealt with correctly and rapidly. The way the president is handling the situation is definitely the right way to do it. There are many things and ways in which to do it wrong, but the president seems to be pointing the plans of social security in the right direction. The president’s plans of reforming social security are right because the privatization is the best way to go, changing the rules for those who would apply for it increases the savings and makes the money go farther, and working with the distribution of different tax percentages would really make the money go a lot farther.
...n the retirement age. Yet Social Security's fiscal outlook remains strong. (“Next New Deal”, par. 3)
The original intention for creating social security was to act as a safety net for retirees, but as time past, there seems to be a great deal of economic issues relating to the program. Social security was created to help benefit retired workers, spouse and children of deceased workers, as well as workers who have become disabled before retirement. This insurance program provides retirees with a steady income once they retire. President Roosevelt signed the program into law on August 14,1935. Since then, social security has been beneficial for many workers and retirees. In fact, social security has become the main source of income for many retirees.
Social Security is a system that was set up in 1935 after the Great depression to help people get through tough times. "Social Security is now used by nearly 44 million Americans"(policy.com). Only people who payed into social security are eligible to collect when they retire. Many people think that they receive the money they pay in but that is not total true. The money that you pay in is used for the people that are receiving it now. "In 1950 there were 16 workers for every beneficiary; today there are only three workers per beneficiary"(policy.com). There is more money going into social security then coming out now. The extra money goes into a trust to be used when it is needed. By the year 2032 those numbers are going to drop. By this time most baby boomers will be retired and collecting social security. This will put a big strain on the funds. There will be more money going out then coming in. And it will not take long to use all the money that is in the trust. By the year 2034 they will only be able to pay 75 percent of the beneficiaries. "The projected average monthly Social Security benefit in 2032 of about 1,100 (in 1998 dollars) would fall to about $800, and would drop further in later years. Average benefits for low-wage earners would drop from $670 to $480"(www.ssab). Theses cut would effect the people just starting to receive benefits and those who are already receiving benefits. And with each year these benefits will decrease. As these benefits continue to decrease "the percentage of aged people living in poverty would rise"(www.ssab).Most people believe this is happening because of the baby boomers generation. There will be more people taking from social security then giving in. By the time my generation is eliable to receive social security there may not be any money to give.
This summation of the state of Social Security was written more than a twenty years ago. Looking back, it seems as though the Social Security system frequently reaches a state of crisis in which predictions of its end arise. Since it was enacted in 1935, Social Security has been amended often, most recently in 1983, when Congress imposed a tax on the benefits of high-income retirees, raised the retirement age, and revised the tax-rate schedule.
A better way to measure the financial trouble facing Social Security is to compare the promised total future benefits to the program 's total future taxes on a present value basis. Unless policymakers cut Social Security and other programs, the fiscal and economic outlook for the nation looks grim. The large baby boomer generation is beginning to retire in droves and average life spans in the nation are continuing to rise. Those changing demographics are driving Social Security 's financial imbalances. When Social Security was created in 1935, the life expectancy for
Social security, since instituted in 1935, has kept many elderly people from running below the poverty line (Hosansky). In 2015, the Social Security Administration predicted that the funds would be depleted by 2034 (Max). This poses a serious threat to the living situation of future generations when they retire. Our elderly, by today’s standards, enjoy a comfortable lifestyle. They are able to retire and still make over one thousand dollars a month. Some people also have private pensions which allow them to live even more comfortably. But with social security funds running out, we must ask the inevitable question. Is it worth having social security anymore? Social security should be kept. One must never fully rely on social security. In addition
Which is why Social Security is still in existence. The program is not exactly working as it is supposed to now. People working now have to ask themselves will there be any social security benefits when they retire. The answer fortunately for them is yes but it will be significantly less of a benefit their mother and grandfathers got. It's even possible that there will be no social security for me when I retire. The government is thinking about raising the age you can collect at since people are living longer.The system is now under financed. For right now it is working as intended but in 2033 it might
Privatizing of social security has been a subject of debate over the years ever since former president George. W. Bush suggested it back in 2004.Over 96% of the American workers benefit from the social security after paying the social security tax (Aaron 12). This is to say that over 49 million people receive some amount of money from the system which fortunately for them is much higher than the taxes they contribute towards the same. While such payment may not be more than $895, nearly two thirds of the American retired population acquires half of their income from the social security payments. For some it is the only source of income. One importance of this social security is its ability to cover the users from unpredictable economic environment including fluctuations in demand and supply and inflation rates. Additionally the security covers them against possible disability or unexpected demise of loved ones. So with the increasing economic uncertainty both nationally and globally, social security is needed more than ever before and this is why privatizing it is the worst idea ever.
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 ...
It’s a matter of either losing all that you have worked for and live in poverty when retired or allowing your hard earned dollars to grow and have a secure comfortable retirement. I believe that Social Security is a doomed Government Program and that Privatization of Social Security would allow for a more secure retirement plan for all Americans. Social Security was first created to help aging Americans in their senior years so they would not end up in poverty. Social Security was signed in as law on August 14, 1935 by President Franklin D. Roosevelt and was fully operating by 1940 (SSA). Originally a retirement program, but Social Security now includes survivor benefits, disability benefits and Medicare and all together is the largest expenditure of the federal government (SSA). Evidence proves that today Social Security is not sustainable which is the reason that Social Security should be privatized, first, because it is currently unstable with a future outlook of becoming even more financially impossible. Next, privatization of Social Security will boost the economy, and finally, privatization will allow for a more comfortable retirement by putting more money in the pockets of the retirees and families.
The social security funds are rapidly decreasing due to many reasons. The reason our social security funds are being depleted is that there has been rise in
As of right now, Social Security needs to be changed in order to keep the system from completely
Social Security was created when Franklin D. Roosevelt signed the Social Security Act on August 14, 1935. The program provided a social insurance system based on the idea that if workers pooled a portion of their wages, they would be able to protect each other and their families against wage loss due to retirement, disability, or death and has become the foundation of economic security for millions of Americans. “Over the past 80 years, Social Security has become the largest single government program in the world, accounting for 26% of total US federal spending in 2014” (Privatizing Social Security - ProCon.org). Today, more than 47 million Americans receive checks from the Social Security system. Because of such high numbers, the security
...care in 2050. While it has been suggested that Medicare funding will run out by 2030, if projected reductions in spending hold true and continue, this system may remain solvent in 2050 (Peralta, 2014).