Social Security Pros And Cons

In the midst of today’s economic turmoil, an on-going debate regarding the viability of the Social Security program is resurfacing and facing serious conflict. Many politicians avoid the controversy of the program because there honestly seems to be no favorable answer that can address the masses and appease everyone. As of June 30, 2011, 57.7 million people or 18.2% of the U.S. population were receiving monthly Social Security benefits.[1] Currently, the program’s future is questionable, many citing that, “the Social Security system is experiencing a declining worker-to-beneficiary ratio, which will fall from 3.3 in 2005 to 2.1 in 2040.” (Social Security Bulletin, 1) There have been several suggestions on how to “fix” the broken system, including

These retirement benefits are a form of social insurance. Throughout a worker's career, the SSA and the Internal Revenue Service, IRS, keeps track of earnings and requires Federal Insurance Contribution Act, FICA and/or Self Employed Contribution Act, SECA, taxes to be paid on the earnings. The OASI accounts plus trust funds are the only Social Security funding source that brings in more than it sends out. The disability insurance (DI) taxes of 1.4% are included in the OASDI rate of 6.2% for workers and employers or 12.4% for the self-employed. The outgo of $140.3 billion while having income of only $109.1 billion means the disability trust fund is rapidly being depleted. This portion of the program, itself, is significant enough to take note for reform as the additional retirees expected under the "baby boom bulge" will hasten this trust fund depletion and experts estimate the total depletion by 2018 without

This is sadly not a reality, although millions are relying on their Social Security to see them through their retirement years. Los Angeles Times puts it, “It’s not a retirement savings program; it’s an insurance plan designed to help the elderly, the disabled, and their families stay out of poverty.” The fact is Social Security’s finances continue to deteriorate. This is due to many abuses of the systems other programs. Policies have carelessly relaxed requirements for other programs to the point that it is more advantageous for people who could otherwise be part of the contributing workforce to instead feed off a declining system. Further, this liberalization is being exploited by rising health care costs. For example, SSDI has doubled in the last two decades, and benefits are outpacing tax revenues causing the system to run deficit. Medicare benefits cost the government an estimated 80 percent of SSDI, producing an altogether bill of $244 billion in tax dollars in 2013. When the tax rate for 1.8 of the worker’s salary, there is no support overall for these costs. (US Government Historical Table