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What Is Social Security Privatization

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Privatization of Social Security
A feeling of frustration is often felt when people who are not receiving social security get their paychecks and discover a percentage of their money goes to social security. Social security was introduced in the 1930’s when President Roosevelt launched a series of federal programs called the New Deal. The purpose of the New Deal was to help the Nation recover from unemployment, hunger, and poverty caused by the Great Depression. The social security Act of 1935 is the most recognizable program from the New Deal which states if you work, you pay social security and Medicare taxes. The purpose of social security is to give you receive benefits from the government if you become disabled, if your spouse dies, or …show more content…

Younger workers are currently paying social security taxes to support the retired, and disabled. Younger workers are being cheated because the value of the taxes paid will not exceed the value of the benefits received in the future. Younger workers will never see the money they are contributing, as the Social Security system in its present form will be bankrupt. According to procon.com “The current social security program will become insolvent by 2034, so a better system is urgently required.” To elaborate, social security may result in bankruptcy because of the baby boom in 1946-1964. The baby boom generation is post-World War II and results in a massive increase in birth rate. The baby boom generation is currently retiring and due to a large number of people about to collect social security, it will create a shortage that the program might not be able to recover …show more content…

Privatization would be a way to retire by putting money in your own individual account. It would differ from social security because your money goes into a separate account, not a budget. Unfortunately, it goes unnoticed that the revenue the federal government collects each tax year from social security is paid out that same year to the beneficiaries. If the number of people contributing when you are retiring is smaller than the years you paid social security taxes, then you wouldn’t be receiving more than the amount you paid when you join the workforce. (Brux 226) Instead of paying a certain percentage of taxes to Social Security, a separate account should be created for your retirement fund. Then, a percent of your paycheck similar to social security taxes would still be taken out, but the amount would be your choice, and no one else could ever touch it. Unlike social security, you can have an option to leave an inheritance for your families in case of your death. You would also be given the opportunity to use this money, and try to double the amount by investing in bonds. Privatization has many benefits and would be a great help for retirement

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The social security is a costing system and it occupies a big proportion in the government spending. In Barbara R. Bergmann’s article “Could Social Security Go Broke?,” she deems that there is enough fund in the social security system and the government can easily transfer the tax income from current employees and firms that employ these employees to the social security to support retirees’ lives. This point of view only can be considered as assumption, but not for the real world. After the finacial crisis in 2008, a large number of employees were laid off during that time and some employees decided to retire early, which results the labor force in American has shrunk. In the meantime, the presence of effective technology products,

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The Social Security act also has an insurance plan for the unemployed and elderly. (sources F G) This connects to the claim because this shows that by giving people social security, that they can use the money to pay debts and buy products from stores. This also helped stores gain business and to start hiring people. This helped businesses get better income and adults save more money because older people won’t have to rely on kids and grandkids to take care of them.

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Social Security also gave financial aid to the disabled along with the unemployed. This act was crucial to the recovery to the nation because it gave people some financial stability and insured people

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The SSA was the first time that the government gave money to help people who needed it. I think it was necessary to end the depression and many of the people who the SSA helps cannot help

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In the Social Security system the money that is deducted from the payroll tax goes into the system immediately. Once it is in the system is it paid back out to the people who are currently getting Social Security checks. It is a cycle, the younger working

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However, there are some people today that abuse this financial aid to reap the benefits by injuring themselves which is unlikely but possible and by exceeding their stay on the free ride when they are healed up and ready to go back to work. Originally there was 37 million dollars distributed to the recipients of social security and now there is about 15 billion (ssa.gov). The government determines the amount of Social Security benefits a person receives based on lifetime earnings for their retirement. Disability benefits are based on average monthly income. Saying that, I do think that social security (governmental aid) is rightfully beneficial to the people who need it, but the way in which people are evaluated to receive money from the government should be more strict.

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It was created as a way to collect taxes throughout an employee's or employer’s working career. This money would then go into a monthly pension, where that particular worker could then use his or her money once they reached a certain age. However, the pension system excluded agricultural workers and servants from receiving any of these benefits, and since women and African Americans were the ones mainly affected by this exclusion, people who were in need of aid never received their social security. The money collected from Social Security would also be given out to mothers with children who needed

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1297 Words | 6 Pages

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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582 Words | 3 Pages

It also offers many other benefits for children, widowed and disabled Americans. Social Security is a federal agency that fights old-age poverty. The primary source of the Social Security poster gives lots of information. It explains that it can offer, “a monthly check to you for the rest of your life, beginning when you are 65”.

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Christopher, Greed was differently the driving factor of the imbalance between the wealthy and the common people. Social Security definitely did help the economy. When those of age 65 and over would retire, it would lead to job positions opening up, which led to new people being hired. It wasn’t really new demand, as younger people would replace the older ones. When people would receive their pension check it wasn’t very much.

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The American Social Security program is in a troubling start. Funding for the program is slowly starting to trickle away as more and more citizens are starting to receive these benefits. The government needs to change something to try and fix this problem. Privatizing the social security program to allow banks to take over the program is one way politicians and economists have considered fixing the issues. This would allow the government to cut back spending in the area, allow the citizens to control more of their own retirement, and allowing them to get a higher return for their lifetime investments into the program.

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364 Words | 2 Pages

In 1935, the Social Security Act was passed in to law. It was the pathway used for other social programs to be developed. Stern, M. J & Axinn, J. (2012) notes that the Social Security Act was a “landmark in American political and social history, reflecting a public commitment to the economic rights of people…extending federal responsibility for social welfare” (p.183). One major program that was created was a program called Aid to Families with Dependent Children (AFDC). AFDC program was funded by the federal government and matching funds.

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1681 Words | 7 Pages

Programs aimed at the social welfare of the older adult had not begun to dramatically flourish until the early 1900s. The establishment of the Social Security Care Act of 1935, allowed for cash benefits to the elderly. For some time the social welfare of the older adult

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2236 Words | 9 Pages

The biggest reason for the development of social insurance was the need for economic security in a modern society. After the Great Depression President Franklin Roosevelt created the “First New Deal” which was for relief and recovering the direct impacts of the Great Depression. The “Second New Deal” was the period of reform to introduce longer lasting changes for the

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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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