Social Security faces an imminent failure of solvency unless it gets privatized. Since the creation of the Social Security program in 1935, there have been several changes to avoid insolvency. The most recent change was the Social Security Reform Act of 1983. This reform resulted from financial projections benefits for retirees. Currently, we are facing a similar situation. According to the Summary of the 2012 Annual Reports from the U.S. Social Security Administration, “the projected exhaustion” date is 2035. Legislators in congress are currently looking to find ways to reform Social Security again; however, because of the projected insolvency, increase in life expectancy, and lack in control of our own retirement funds, Social …show more content…
The former was a firm that illegally paid returns to its investors from money that was collected from subsequent investors; the latter is a government agency that pays benefits to retirees from payroll taxes collected from current participants in the job market. Yet, both entities are similar because they both share the inability to pay returns or benefits in the event of a depression. For instance, during a depression, Social Security gets reduced funding when unemployment rises. In turn, this creates a strain on the Trust Fund to pay retirement benefits. As per the Social Security Administration Trustees Report 2010 Table IV.B2, the worker to beneficiary ratio in 2010 was 2.9 to 1; on the other hand, the worker to beneficiary ratio in 2033 is …show more content…
According to the Administration On Aging, it projects that by the year 2030, 19.3% of the population will be age 65 and older; compared to 6.8% of the population in 1940. Hence, this increases the years in retirement for Social Security beneficiaries and increases the lifetime amount collected from the Trust Fund. In order to address this issue, thehill.com reported that Republican senators Rand Paul and Lindsey Graham proposed to increase the Social Security retirement age to 70; contrary, Democratic senators Harry Reid and Tom Harkin argued that Social Security “has not contributed one penny to the debt.” Republican senators are out of order in dictating the age of retirement because life expectancy, and having the mental and physical ability to continue working while contributing to the Trust Fund are two distinctive propositions; on the other hand, Democratic senators are misleading the public with their statements because the Historical Tables of the 2011 Budget of the U.S. Government shows Social Security as an expenditure of the annual federal budget. With that in mind, privatizing Social Security would give beneficiaries the control of the appropriate age for them to