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Social Security System: Barry Bosworth And Gary Burtless

998 Words4 Pages

In the 1930’s, The Great Depression highlighted the need for a system to provide assistance for the poor and elderly. In 1932, President Franklin Roosevelt proposed a social insurance program allowing workers to place funds from paychecks into an account that would be available upon retirement. In 1935, this became law, being recognized as the Social Security Act (Grabianowski, 2005). This version of the Social Security Act created retirement benefits at the age of 65 for the retired worker only. In 1939, Congress amended the program to allow spouses and dependent children of retired or deceased workers to receive the entitlements. Changes in population and economic situations created later changes in the Social Security system. …show more content…

The bulk of government benefits, notably Social Security, are paid to retirees. These programs are financed through payroll deductions from citizens still working. When American workers pay into Social Security, the money is not invested in an account where it can be withdrawn after retirement. The younger workers are paying for retirees. The program is a pyramid scheme that works as long as it is bottom heavy. Potential problems could exist with privatization of Social Security. Barry Bosworth and Gary Burtless stated in their article, Privatizing Social Security: The Troubling Trade Offs that shifting the retirement system away from a pay-as-you-go financing to an advanced funding, privatization can boost national savings. Such a shift will require a sacrifice through cuts in benefits or an increase in combined contributions to Social Security as well as a new retirement plan. Privatization plans that do not require a consumption sacrifice, will not achieve a higher saving …show more content…

Neither solution would be popular, in that raising taxes would not be a wise political choice; decreasing benefits would affect millions of retirees and those approaching retirement age. Despite the unpopularity of increasing Social Security taxes, this has potential to be a viable solution. “Workers currently pay 6.2 percent of their earnings into the Social Security system up to $113,700 in 2013. If that tax rate was gradually increased to 7.2 percent by 2036 it would eliminate just over half (53 percent) of Social Security’s deficit. If workers and employers each paid 7.6 percent, it would eliminate the financing gap (Klein,

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156 Words | 1 Pages

The idea was that people would contribute to funds as an insurance in hopes to provide economical security during old age or unemployment due to a disability. Roosevelt also wanted to help people plan for the future but also make sure that the social security act would not have negative effects on the economy despite congresses stance that an individual should be responsible for their own future without the help of the government.

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685 Words | 3 Pages

President Roosevelt delivered his speech on August 14, 1935 in Washington, DC where he signed the Social Security Act that embarked an unforgettable experience for many people. The social security measures and offers some preservation to several millions of citizens who will receive benefits through unemployment compensation. Also, the social security act includes old-age allowance and increased services for the protection of children and the impediment of ill health issues. Roosevelt believed in the protection of peoples ' lives and how each individual should have their own identity. There were some pros and cons in regards to the Social Security Act, each individual had to pay taxes every year for the rest of their lives.

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Before the New Deal, many conservatives often found the idea of social security to be frowned upon because of the misuse of hard working tax money going to waste. This was a significant change because throughout the great depression, the federal government was not heavily relied on for support within the workforce until after the New Deal programs were put into effect. In times of need,

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1044 Words | 5 Pages

Another con to replacing Social Security is that gives the person responsibility of having to make a retirement plan and being able to make investment. Many people are not capable of such decisions and many will be taking an investment risk. I support replacing Social Security with private funds because as I mentioned earlier “instead of sixteen workers paying in for every beneficiary, right now it 's only about three workers” (Reno) for social security to function to its full potential the ratio would have to be sixteen to one but the number is much less than that its only three to one and the ratio will only continue to fall. As baby boomers begin to retire it is causing the social security system to face difficulties since the baby boomers generation will be a big number of people retiring that the working class will not be able to support them (Reznik, Shoffner,

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821 Words | 4 Pages

Furthermore, this act was very beneficial to the elderly people because, it ensured them an income when they otherwise would have been out of luck. On average in 1935 people who received Social Security benefits go $19.74 per month and a minimum waged worker would get $40 a month without overtime. Saying this, the average Social Security benefit receiver would not get enough to live off of so it would be considered a supplement to an income. Franklin D. Roosevelt initiated this act in hopes that it would partially help the people during and after the Great depression time period (1929-1939). During this time roughly 50% of the elderly population lived in poverty.

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931 Words | 4 Pages

How did it win acceptance? Beginning in 1939, workers could retired at age 65 and get a payment every month ranging from $10-$85 based on their contributions to the fund. They started paying an unemployment tax to provide benefits to workers who lost their jobs through no fault of their own. “Social Security squared with America 's historical individualism because it was neither structured as a welfare program nor sold to the public as such.

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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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1324 Words | 6 Pages

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774 Words | 4 Pages

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762 Words | 4 Pages

In a statement to the public, Franklin Roosevelt showed a concern for” young people who have come to wonder what would be their lot when they came to old age” even with all the people who had no job security but employment. Even though he knew that the people could never be insured a hundred percent of the population going against the same percentage of hazards of life. He was hoping that this act would help all the senior citizens from becoming homeless and stay healthy. This act was created to combat unemployment; Social Security now is used primarily for a safety net for all the disabled and retirees. The act help give death benefits to tax payers.

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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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582 Words | 3 Pages

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2236 Words | 9 Pages

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1002 Words | 5 Pages

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