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Social Security Pros And Cons

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Outline

Social Security is an important retirement program because it guarantees lasting income, unlike other retirement programs.
Participants are guaranteed to receive income in retirement.
Social Security payments increase with inflation.
If nothing changes, there will be a Social Security crisis, because the system is relying on investments that will run out.
Americans on average live longer than when the system was created, causing the ratio of retirees to workers to increase.
More benefits are given than what taxes pay for.
While changes were made to accommodate for the baby boomers, the economy did not perform as well as planned, creating a shortage of funds.
An unequal distribution of earnings pushes more earnings over the limit subject …show more content…

A common proposal to solve the problems of Social Security is privatization. If Social Security is privatized, then some of the payments will be invested into stocks instead of straight to current retirees. Privatization is often beneficial. In Chile, privatizing social insurance accounts increased national saving rates (de Rugy 2). Not only does privatization create more money for workers due to the nature of investing, but it encourages them to save. The citizens end up with more money during retirement. They will be able to continue contributing to the economy even without working by fueling businesses as consumers and investors. Savings are also useful to pay for unpredictable …show more content…

In order to put money into something new, the money first has to be taken out of something else. Social Security does not exactly have a disposable income, since the retirees want their benefits. “According to the Congressional Joint Economic Committee, shifting to privatized accounts would increase the Social Security shortfall by $2.2 trillion over the next 75 years” (Bailey). Privatizing Social Security causes it to run out of funds faster, rather than preventing it. One could argue privatization is better in the long run, but it is not what America needs now. 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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