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Social security is financed with the idea that those people currently working, along with their employers, can donate enough money to pay the benefits to those currently getting them: not only retired people but some people with disabilities, and some widows with young children. When Social Security first began, this system worked well. The problem facing Social security is that the numbers of retirees are going to increase at the same time the numbers of workers will decrease. When Social Security began, there were five workers for every one person receiving benefits. Current projections, however, suggest that by 2030 that ratio will be three to one. By 2080, it is expected to shrink to two to one (Reynolds, PAGE). This system, called "Pay as You Go," will eventually be unable to provide all the funds needed to make payouts to individuals, and will essentially be bankrupt.
Several solutions have been proposed. President Bush would like to see younger workers take some of the...
The idea behind this approach is that in 2005, most people are more sophisticated investors than most were when Social Security was begun. However, critics point out that this approach will not increase funds to Social Security, is likely to weaken it further and will shift more retirement burden to the workers without any guarantee that those workers' investments will in fact perform well over time (O'Neil, PAGE).
Another choice would be to increase the money workers and employees pay as FICA, or social security, taxes. This could counteract the effects of the shrinking number of contributors and increasing amount of payments. However, it seems likely that workers who pay more into the system would expect to receive more when they retire (Reynolds, Page), and might well resent having to pay twice as much as those currently retired. In addition, some worry that the increased taxes could slow…
BIBLIOGRAPHY
O'Neil, John. "Risky: Privatizing Social Security An Unwarranted Gamble." NEA Today, Sept. 2004.
Reynolds, Alan. "Myths about social security: and the dispelling truth." National Review. March 14, 2005.
Social Security was instituted with the passage of the Social Security Act of 1935. It was signed into law by President Roosevelt as a means of providing a social safety net for retirees. The passage of Social Security occurred during the depths of the Great Depression. Prior to this, the concept of social security did not exist in the U.S. -- you either worked until you died, or you retired
Social Security A proposal to change the program Reducing Benefits: This can be done in various ways. Monthly benefits can be reduced by minimizing cost of living adjustments or by minimizing the primary insurance amount (PIA) for a certain average indexed monthly earnings (AIME). Other proposals include targeting reductions towards high-income retirees. Benefits can also be reduced by increasing the retirement age or imposing full taxes on social security benefits. These benefit
In 1940, an amendment to the BNA was passed, followed by the first institution of unemployment insurance in Canada. The Marsh Report offered a comprehensive social security plan for Canada that included old age pensions paid for by employment taxes, as well as a public health plan. The Canadian Social Security system continued to grow, subject to the political whims of the time, until the 1970s. After this time,
("Canada Social Security and Welfare," 2012) (Aaron, 1999) (Livingston, 2007) This is different from Social Security as these areas are not covered. Any kind of assistance for health care would fall under other programs (i.e. Medicare and Medicaid). However, these are only designed to protect those individuals who meet the age and income requirements. To provide assistance for low income families, this would fall under the WIC program (which is
Slow the growth of traditional Social Security benefits for middle- and upper-class Americans. The benefits of the wealthiest Americans (those who earn more than $100,000 a year) would grow "only" at the rate of inflation. In this way nobody would suffer a true cut -- even the richest Social Security recipients would be guaranteed at least the same, inflation-adjusted level of benefits today's retirees receive. Meanwhile, because benefits for the
Social Security Today The History of Social Security: What it is and How it Works The Social Security system was established in 1935 by President Roosevelt in order to provide some form of economic security to the elderly. The first world war and the following world wide economic depression had left many elderly people without a support system. This insecurity, along with the general economic turmoil of the era, led to many