Pros And Cons Of Privatizing Social Security
The social security is a costing system and it occupies a big proportion in the government spending. In Barbara R. Bergmann’s article “Could Social Security Go Broke?,” she deems that there is enough fund in the social security system and the government can easily transfer the tax income from current employees and firms that employ these employees to the social security to support retirees’ lives. This point of view only can be considered as assumption, but not for the real world. After the finacial crisis in 2008, a large number of employees were laid off during that time and some employees decided to retire early, which results the labor force in American has shrunk. In the meantime, the presence of effective technology products,
Some pros to having Social Security replaced is that the induvial has more control of its retirement fund then they will with Social Security. Private funds make Americans capable of making their own decisions about how their retirement contributions are invested. If Americans invest in private funds they are investing in private capital markets which can produce net increase depending on how the government handles the transition of Americans replacing social security with trust funds (Tanner). Although, private funds sound like a good replacement for social security “many people lack the basic financial literacy to make wise investment decisions on their own” (Privatizing Social Security). Social security has started to face many financial difficulties over the years and resorting to private funds would actually make the social security problem worse.
putting the security of these civilians a risk, defeats the whole purpose of social security, which is why the privatization of Social Security would be foolish. A major risk of privatization is that the transition from a “pay as you go” system to a fully funded system would be very difficult to manage, for many reasons. Currently, the taxes paid by each generation of workers fund the retirement benefits of the previous generation of workers. While each generation of workers has been confident that its retirement would be financed by the next, this confidence is eroding (Pollard 1).
Charles Fusco, Federal Writers’ Project interview in which he offers his perspective on the New Deal, “Roosevelt Is a ‘Damned Good Man’” says, “This social security measure gives some protection to 30 million of our citizens who will receive direct benefits through unemployment compensation, through old-age pensions, and through increased services for the protection of children and the prevention of ill health.” “It will act as a protection to future Administrations against the necessity of going deeply into debt to help the needy. It is, in short, a law that will take care of human needs and at the same time provide the United States with a sound economic structure”(SQ 3, E). Social security was very important to the Success of the New Deal. The text says, “Social security was a piece of this change, signaling Americans viewed the government as responsible for ensuring that older Americans would live decent lives.
The idea was thought of by some to be an outrageous proposal, but is now widely accepted by both liberals and conservatives everywhere. Similar to minimum wage, social security was also thought of as a radial form of collectivism back when it was established. (“Franklin D. Roosevelt” 2016) Social security works by adding a tax on everybody's pay, that is kept track of so when they retire, it can be paid back to them by the government. It is a way of guaranteeing a person saves for retirement.
In the year 1934 the American government would begin to answer it’s people’s call with President Roosevelt’s creation of the Committee on Economic Security (CES). Their task was to study economic insecurities within the United States and create a detailed legislative proposal as the basis for the Social Security Act. To accomplish this the CES completed a study that, according to the Social Security Administration themselves, was a milestone for the time: “Their full report was the first comprehensive attempt at this kind of analysis in many decades and it stood as a landmark study for many years“ (Social Security Administration, n.d., Header 16 Paragraph 1). With a recent diverse and detailed study to base their recommendations off of, the
Christopher, Greed was differently the driving factor of the imbalance between the wealthy and the common people. Social Security definitely did help the economy. When those of age 65 and over would retire, it would lead to job positions opening up, which led to new people being hired. It wasn’t really new demand, as younger people would replace the older ones. When people would receive their pension check it wasn’t very much.
Democrats support progressive taxation and simultaneously promote policies that benefit low to middle income Americans. Additionally, Democrats believe in encouraging the creation of jobs, investing in clean energy, and supporting small businesses. Similar to their view on economics, both parties have their own corresponding perspectives on Social Security. Many Republicans back having more personal control over their Social Security, as well as the idea of privatization. While some Republicans support the reform of Social Security, others seek reform so as to support the platform’s future evolution.
One benefit of having the government privatize Social Security is that it gives the citizen much more control over their own retirement. Allowing them to monitor and track the bank account and watch it rise allows them to have a higher entitlement to their own earnings. Instead of just dumping money into the system all throughout their lives and not seeing anything until retirement, it will give them something to look at. With the current
The idea of privatization works for those who have a lot of money and time that they waste. Setting up and account and running that effectively is costly and requires a lot of knowledge about investment opportunities and how to effectively make sure you will have enough money. This is so much more complicated than SS and for those who are working many jobs and were not able to go to college and get the knowledge of how to invest properly. Another issue is that the stock market is very up and down, if you are unlucky and have to cash out during a recession you will get so much less money than those who are born just a couple years later, thus making it harder for everyone to guarantee that they will get all the money that they need. Privatizing Social security is good for the upper-class but fails to consider those who are just barley getting by and cannot take time out of their day to make sure their money is going to be
So called well intentioned by socialists, who in my opinion had no concept of the dynamic of the free market, designed what is essentially known today as a Ponzi scheme. The Social Security Act was enacted in an atmosphere of nationwide suffering, deprivation and discouragement, and it was not well thought out, as is the case with most socialist utopian schemes. There was the task of setting up vast administrative systems to implement the provisions of the Act to bring its benefits quickly to the millions of people who really needed them. The Act covered a broad spectrum of benefits but none the less all socialistic by design.
Ellis explains, “The justification for Social Security is based on the humanitarian concept that financial distress in old-age, poverty and illness can and should be alleviated by the Government.” The socialistic idea that governmental control is necessary in every aspect of life is evident in the social security system. However, as a nation, America has consistently proven in every aspect of life that capitalism trumps socialism.
Increasing the payroll taxes paid by workers and reducing benefits for workers who are not yet retired. The real issue is that currently our payroll taxes are paying for people who receive social security benefits because the program run out of trust funds which is not how it was suppose to work. Another reform was to privatize social security where people will be allow to invest into it and free markets will result from the early funds
Since social security began in 1935, many retirees have depended on social security for many years. Though, according to predictions there is going to be a huge cut in the benefits of this program. The millennial generation cannot depend on the social security benefits, for when they retire in 40 years, they will need to find other ways to save for the future or to figure out a way to fix the social security trust fund from becoming expended. Social security is a foundation of economic structure for millions of Americans.
As a society we need to accept that it is up to our generation to fix this issue. Reforming Social Security will benefit everyone living in the U.S. in the long run. Restoring Social Security to its once former glory is a necessity to benefit our further generations and to create a better future for the next generation of workers. In order to accomplish this lofty goal I propose that we increase the payroll tax cap to boost Social Security’s funding and reduce benefits for the higher income earners who do not need Social Security as much as others do. The majority of Social Security’s income originates from the Social Security payroll tax.
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