Title of Paper : Social Security
Social security, created in 1935, is the most costly item in the federal budget. The program provides old age, survivors’ and disability insurance to a healthy portion of Americans. Workers and their employers fund the system by each paying payroll taxes. The Internal Revenue Service collects the taxes and deposits the money in government-administrated accounts known as the Old Age and Survivors and Disability Insurance Trust Funds(OASDI). The payroll tax revenues are used to pay benefits to those people currently collecting Social Security pensions. Social Security taxes also pay for Medicare, the national health program for the elderly.
The huge problem with the current situation facing Social Security is the increasing deduction of workers in the work force paying for workers retired.
“Due to the large number of aging baby boomers, American 65 and older are the fastest-growing segment of the population. The population growth of Americans age 65 and older is 112% in the years between 1995 and 2040. The population growth in age 20-64 is 24%. The population growth in ages under 20, is 5%.
What these numbers essentially represent is a cause problem with age differences in the future. Soon, less workers will be in the job force trying to supply more retirees with Social Security. Currently, many ideas have been juggled around trying to find a sound and reasonable way to resolve this problem. Granted, the problem will not happen overnight, but rather over a long arduous duration of time.
The question first arises, “Can the existing system survive without major reforms?” The early designers of Social Security and many Democrats are baffled at the recent proposals to change Social Security. Most believe that Social Security is still able to provide a safety net for retirees and their survivors if minor adjustments are made. “Occasionally raising payroll taxes or recalculating the way benefits are paid out.” Some Democrats look at major reform as a way of pitting war between generations. They stand on common beliefs that Social Security has worked for over 60 years by providing a steady stream of monthly payments that beneficiaries can rely on. Also, it has helped lift millions of seniors out of poverty. Democrats also criticize the Grand Old Party for “playing”...
... middle of paper ...
...vatization of personal savings would be advantageous to the nation’s economy, delivering bigger pensions to workers and helping the economy grow faster. Some believe the emphasis on personal savings would give the added feature of encouraging more individual responsibility at a time when the nation prepares for a surge in its elderly population. Privatization would differ from Social Security in two important ways. First, the amount a worker receives at retirement depends solely on how much one contributes to savings and how well the investments perform. In simplified notation, those who set aside more and invest wisely enjoy more comfortable retirements. Secondly, pensions are paid out of an individual’s accumulated savings instead of financed by taxes on active workers. For example, Chile for a little less than two decades has replaced it’s system which was much like Social Security with a system incorporated around the idea of privately invested accounts. The results are astounding. The plan is relatively elementary because it focuses on workers placing 10 percent of their monthly income into a savings account. With this, government leaders boosted the national savings rate
Need Writing Help?
Get feedback on grammar, clarity, concision and logic instantly.Check your paper »
- As the baby boomers continue to reach the Social Security-drawing age, the American government’s surplus of finances will gradually fall to a dearth of funds unless intervention is made quickly. Plans for reform have been mentioned, but so far nothing has been done to supplement the future’s inevitable lack of funds. The sooner the government takes action on Social Security, the less severe the reform will have to be. Well- planned adjustments in the smallest increments can make the largest impacts on the system of Social Security.... [tags: Social Security, USA, ]
699 words (2 pages)
- More and more talk recently about the fact that Social Security is on the fast decline has left many people, especially those around the retirement age, wondering what they are going to do for their income when they retire and the system falls through. The fact that this system is disappearing is quickly turning into a major problem because there is a large percentage of the economy that is on the verge of retiring and they are going to need money for that. How, though, will they receive this money if it no longer exists.... [tags: American Government, Social Security Fund]
2271 words (6.5 pages)
- The Social Security System is in need of a new reform; our current system was not designed for the age stratification we have at this time. The U.S. Social Security Administration Office of Policy states, “The original Social Security Act, signed into law on August 14, 1935, grew out of the work of the Committee on Economic Security, a cabinet-level group appointed by President Franklin D. Roosevelt just one year earlier. The Act created several programs that, even today, form the basis for the government's role in providing income security, specifically, the old-age insurance, unemployment insurance, and Aid to Families with Dependent Children (AFDC) programs.” Social Security was modeled... [tags: United States, Social Security Administration]
873 words (2.5 pages)
- Social Security is not the Ponzi scheme some oppositions may advocate. Social insurance, as envisaged by President Roosevelt, would address the permanent problem of economic security for the elder community by creating a work-related, contributory system in which workers would provide for their own future economic security through taxes they paid while employed. It provided an alternative both to reliance on welfare, and to radical changes within the capitalist system. It can be seen as a moderately conservative, yet activist, response to the challenges of the Depression (SSA, 2014).... [tags: social security act,ponzi scheme,social insurance]
857 words (2.4 pages)
- 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.... [tags: retirement plan, privatization of social security]
1348 words (3.9 pages)
- In the past decades, Social Security Administration has had annual revenue that excesses the amount it pays to beneficiaries. However, U.S. economy situation has created a long-term effect in many of the public organizations and departments. Social Security Administration is one of many departments that will face some economy issues during U.S. economy recovery. Social security will post nearly $600 billion in deficits over the next decade as the economy struggles to recover and millions of baby boomers stand at the brink of retirement, according to new congressional projections, (Ohlemancher, 2011).... [tags: American Government, Social Security Deficit]
912 words (2.6 pages)
- Social Security was established as a promise to the people of continuation of income into retirement. Well the road to hell is often paved with good intentions, because that promise now has the country in economic uncertainty. The guarantee that workers will be taken care of in their old age if they paid their Social Security tax, is no longer guaranteed. If we don’t come to a unanimous decision as to a plan of reform; financially our country is doomed. Social Security has always struck me as a socialist program.... [tags: Social Security Reform]
2764 words (7.9 pages)
- Most of the problems of the United states are related to the economy. One of the major issues facing the country today is social security. The United States was one of the last major industrialized nations to establish a social security system. In 1911, Wisconsin passed the first state workers compensation law to be held constitutional. At that time, most Americans believed the government should not have to care for the aged, disabled or needy. But such attitudes changed during the Great Depression in the 1930's.... [tags: Social Security Essays]
2175 words (6.2 pages)
- The Privatization of Social Security Many people don’t understand how the Social Security system really works. There are no separate Social Security "accounts" set up for each taxpayer to which he contributes his Social Security "tax" each year. Many people believe these accounts exist, that the money they pay into their accounts grows each year until retirement, and when they retire they get back what they paid in with interest. This is not true. Most people are unaware of the fact that our current Social Security system is a "pay-as-you-go" program, which means that the revenue the federal government raises each tax year for Social Security benefits is paid out that same year to benef... [tags: Social Security Privacy Retirement Essays]
2005 words (5.7 pages)
- Social Security A Historical View Social security, the federal retirement system, is one of the most popular government programs in United State?s history. Today, Social Security benefits are the backbone of the nation's retirement income system. The long road to the successful development of social security began in 1935. Before 1935, very few workers received job pensions. Those workers that were covered never received benefits because they were not guaranteed. Franklin D. Roosevelt signed the original Social Security Act.... [tags: Social Security Retirement]
2689 words (7.7 pages)