Social Security
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Social Security
The Social Security system taxes individual Americans so as to build a platform for their retirement. It is rewarded upon disability or death, and is essentially a government run piggy back, providing a comfortable lifestyle to those of old age and or disability.
Currently, social security in its entirety faces a crisis, and is a hotly debated topic among all American. The continuing decline of social security can be attributed to two leading factors: (a) The poor condition of today’s economy; and (b) the retirement of the baby boom generation. When combined, these two factors pose a significant threat to the present and future strength of the social security system.
The baby boom generation is composed of Americans born during the late forties and to early fifties. This massive population, all nearing retirement, will cause the beneficiary costs of social security to increase from 48 million to 89 million by the year 2035 (socsec.org). Experts also foresee trust fund exhaustion by the year 2042, and as a result, only 73 percent of promised benefits will remain for future retirees. Not only will future generations never reap the benefits of their own tax dollars, but also, the already depleting economy will suffer crippling effects.
Proposals such as privatization, fast action and careful distribution of finances are all ideas suggested to prevent accumulated debt and the overall downfall of social security. Commissioner of Social Security, Robert M. Ball, gives a more detailed three-step plan to alleviate the crisis. The first step is to increase and restore the maximum earnings base to 90 percent. Ball explains that this will “maintain an invested reserve that can help meet future costs,” but must be done at a steady rate in order to avoid an exponential tax increase (www.socsec.org) The second step is to earmark the estate tax for social security. This will defer the overwhelming deficit increase. (www.socsec.org) Lastly, Ball suggests investing in equities, which will bolster the trust funds from which social security is drawn.
Fast action is the most effective solution to the problem at hand. Although some negative backlash will arise, I believe slightly raising taxes over time is an effective way to reduce deficit. Obviously the working class will feel the greatest strain if this is put into action, but if nothing is done social security as a program is bound to lose its credibility.
As previously mentioned, privatizing social security is an approach rallied by many conservative. Privatization promotes personal account management, and puts social security into the hands of individual Americans. Specifically, each person controls his or her own investment accounts without government involvement, and the terms of their social security will depend on the growth of their investments.
There are several pros and cons to the privatization of social security. One positive aspect of privatization is control. Privatization allows the individual to oversee the movement of his or her finances as opposed to the government controlling their money. Also, the National Committee to Preserve Social Security and Medicare states “because private accounts are financed by taking money out of Social Security, privatization actually increases Social Securitys funding gap and moves forward the date of its insolvency from 2041 to 2030.”
On the other hand, for a majority of American