SOCIAL SECURITY

Social Security



Social Security

Introduction

Social Security Act in 1935 created the Social Security plan in the same year. A basic program for retirement for employees working in America was created by the Act, despite their income. There are many social programs which administer survivors, old age, Health insurance program, and Disability (OASDHI). Further these programs also included programs like Medicare, welfare, public assistance, provision for black lung benefits, and unemployment insurance. These all programs are treated under one roof, but we will be only covering retirement social security plan. The major issue discussed under is regarding the fact which says that, the U.S. Social Security program will spend more than its income in taxes in 2016 and will be insolvent in 2037, when you can only pay 75% of the profits.

According to Social Security, people belonging to middle and poor class are suppose to pay a considerable amount of their gross income around twelve percent for securing their retirement. This money is not invested or saved, but is transferred to the current beneficiaries of the program directly with the guarantee that the earnings of future tax payers would be transferred to the current tax payers when they would get old. In view of the fact that this scheme does not create any wealth but benefits one person is receiving are essentially becoming expense of others. Also, according to Social Security every part of the guarantee given by the government regarding anything including financial security is at the sympathy of political impulse. The government might change what amount of an individual's money it receives, and the payroll tax has increased seventeen times since 1935. The government may spend its money wherever it wanted; it could be any other programs which allocate the surplus of Social Security in the long term (Hahn, 2009, 2).

Discussion

Purpose of social Security

Social security's purpose is to provide a guaranteed income for the workers after retirement so that they would be able to enjoy comfortably in future after retirement. This program was designed to support retirement pension plans that are offered by employers to their employees. Thus, we can say that the primary operation of security palm is as a retirement plan sponsored by government. The benefits paid to the employees of social security are derived from payroll taxes of those people who are currently working.

The people who initially got the beneficiaries from Social Security System did not contribute financially into the system, and between the first ten years of the system people, ratio who was paying Social Security taxes to the beneficiaries was more than forty to one (Special Committee on Aging, 2010, 24). Thus, the benefits were given to the people who has past the age of 65 does not help much in improving the situation of unemployment and poverty. Social Security built up a surplus which was invested in US Treasury Bonds. Now that, the first of the Baby Boomers are retiring this year, Social Security is no longer collecting a ...