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Social Security Privatization Essay

446 Words2 Pages

Social security should continue as a socially shared program, or should it include private investment options According to “(Segal 2015) one of the most contested ideas for improving the Social Security system is to privatize parts of it. This means that instead of the current system, in which all contributions are collectively held by the federal government, each person could earmark a part of his or her contributions for a private program. Advocates of the privatization of Social Security argue that creating privately invested accounts would encourage more individual responsibility and offer workers the opportunity to earn larger benefits. The idea behind privatization is that a portion of the money an individual would pay into the current …show more content…

What you think? I wouldn’t mind it the system took at part out it and splint it in two different ways to make sure there be something left in 2034. The system, today’s workers are taxed and the money so acquire is paid to the retirees (elderly). Today’s workers are told how much money is in their personal social security accounts. This is undoubtedly misleading because their so called money has already been paid to the elderly. Thus government’s foreboding promise of paying today’s workers their social security seems only a little bit optimistic. A shift from current program of Social Security to personalized fully funded program will be advantageous for today’s workers. Since they are not required to pay Social Security taxes any more, their personal disposal income will rise. They will themselves plan for their retirement and hence might start saving more. This may result in an increase in the current U.S. saving

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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.

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I was born in America and have grown up in America my entire life. I have never experienced anything similar to what the characters went through in the book, The Book of the Unknown Americans by Cristina Henriquez. Therefore, I found this book to be very interesting and eye opening. The characters had to pack up all their belongings, leave their comfortable life, and leave family and friends behind to move to a new country. This journey came with lots of challenges.

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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).

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Did he ever wonder what would happen if the program paid out more than it brought in? The system beginning to default today, and it will most certainly have economic and social ramifications. The idea of social security today has also shown the people’s dependence on the American government, and it has developed into the fallacy that social security is a retirement investment fund: it most certainly is not. FDR’s original concept of Social Security was not that it would serve as a replacement to savings but as additional allowance. But today, because of the nature of the program, people view Social Security as a bank with unlimited funds to which they are entitled to.

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616 Words | 3 Pages

It marked a shift in the role of the national government, as it established a system of retirement benefits for seniors and more such as unemployment insurance, aid to dependent children, and disability insurance. These programs helped provide safety for Americans who were struggling during the Great Depression, and they continue to provide support to millions of Americans today. The program was designed to assist older Americans who were unable to work, and it has been instrumental in reducing poverty among seniors. According to History Editors, the “Social Security Act”, the president “created Social Security, a federal safety net for elderly, unemployed, and disadvantaged Americans. The main stipulation of the original Social Security Act was to pay financial benefits (Social Security Act).”

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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.

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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.

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1289 Words | 6 Pages

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

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Now, Social Security is outdated and needs to be reformed. The Social Security Act was passed over 80 years ago. Since 1935 there have been many amendments to the Social Security Act, but it has never been reformed. It is still not up to date with the 2016 economy (“How Does the Social Security System Work?”).

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1130 Words | 5 Pages

Social Security at its core is a form of social insurance allowing governments to provide economic security for its citizens. The concept is simple yet as with any government run agency there are many faults and issues, which usually are related to organizational structure or funding. The difficulties facing the Social Security Administration are less surprising when we consider someone without an actual college degree who received the job after a presidential nomination is running it. However, we must also remember in the American job market it is not what you know that is important but instead whom you know. Why do we need Social Security?

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1420 Words | 6 Pages

Social Security began as a promise to citizens of the U.S. as a means of income after retirement. Though the idea certainly had good intentions for our retired population, unfortunately many years later and unforeseen changes now have our country in economic uncertainty. The commitment made in 1935 by the U.S. to allow for workers to be taken care of during their retirement life after paying into Social Security seems to be quickly fading away. If some sort of reform of our social security plan is not decided upon in the near future our country will most certainly see a financial crisis along with the inability to provide payments to the recipients of social security benefits. Social Security in many peoples opinion is a socialist

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569 Words | 3 Pages

The relationship between the Second Industrial Revolution and World War I How did the inventions of the Second Industrial Revolution, and especially the new ways of communications, affect the First World War? This is the question I will try to address throughout the semester.

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1684 Words | 7 Pages

Instead, America needs to prevent a sudden drop of benefits from Social Security, which would crush the economy. Privatization makes that more difficult, since more money is needed to invest in addition to paying for benefits. Privatization might have some positive aspects, but the expensive shift and inherent risk are not appropriate for Social

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1094 Words | 5 Pages

One solution that I believe can be beneficial is instead of the working people paying for other people’s Social Security, they pay into their own. Therefore, a certain chunk of their paycheck will then be inputted into their personal fund. Social Security’s income mainly comes from payroll tax contributions by 86%, alongside interest on trust fund assets by 10%, and income taxes on Social Security benefits by 3%. Changes to the tax rate wouldn’t change benefits and could close the entire solvency gap by a gradual increase for employees and employers. Also, it would lower the poverty rate amongst the elderly who benefit from Social Security by about fifteen percent.

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1002 Words | 5 Pages

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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