American Government: Social Security - Paper Example

Introduction

Social security refers to a form of insurance policy in the United States that is run by the federal government and aims to cater to the needs of the citizens upon their retirement and to disabled people, also referred to as survivors, along with their families.

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Benefits

The social security system has an array of benefits, some of which may seem insignificant until a crisis hits. For example, when a spouse dies or when people are incapacitated by terminal illnesses, for example, and can no longer go to work. Additionally, for people with disabilities, whereby medical conditions last for more than one year or those whose illnesses are expected to result in death, the affected persons are paid disability benefits since they cannot work like everyone else. This then bridges the gaps in economic differences. People with disabilities are not on the lowest end of the economic spectrum and can normally live, just like working people.

People who lose their spouses-widows and widowers, and dependents of the deceased, who are included in the social security program, received survivors' benefits. This can ease the burden of those dealing with the loss since financial support is one of the things that burden people the most when dealing with the loss of a loved one. Finally, social security ensures that people who are in their old age do not fall into poverty. This was, in fact, the main reason as to why the social security act was passed into law. For eligible citizens, once a person reaches their retirement age, they begin receiving full benefits; hence, even though they have stopped working, they can still cater to their needs and not burden others with the same (Engen & Gale, 1997). This is also because the social security benefits are well adjusted in case of inflation; hence one is assured of reasonable benefits no matter how the economy is looking at that particular time.

History and Functions

The social security system had its origin from 1935 when the social security act was established and signed into law by Franklin Roosevelt, who was president. Its main aim at the time was to ensure citizens who retired had a source of income. Since then, however, it has undergone various changes to include a majority of the workforce and social welfare programs. During the great depression is when the act was enacted to ensure that US citizens did not have to experience risks in finances resulting from deaths of spouses or breadwinners, disability, retirement, and poverty. The amendments that the social security act has undergone are in 1939, which marked the first amendment. The act was made inclusive of spouses and children to American workers who were retired. What followed was the addition of the disability program in 1954 (Schieber & Shoven, 1999).

After that, in 1960, the congress was given power by the Supreme Court to revise and amend the benefit schedule. In 1961, congress affected these powers, as it lowered the age of retirement to 62years with reduced benefits. People who began receiving benefits earlier received lower benefits than those who waited until they were fully retired. In 1965, Medicare health care was included in the act, this bringing about the increase in those joining Medicare to 20million in the three years following its inclusion in the social security act. The following year (1966), Medicare increased tax to 0.7% to cover medical expenses that had increased—raising the retirement age for younger workers to 66 and 67 years followed in 1983. In the same year, also. Taxes were introduced on social security benefits. In 1984, the disability benefits reform act was modified. Afterward, in 1992, there was an addition of the State Children's Health Insurance Program for citizens earning low incomes. In 1997, AFDC was replaced with Temporary Assistance To Needy Families (TANF). In 2009, there was an amendment where congress signed into law denying social security benefits for prisoners.

Wrongs

Despite the many benefits, the social security system comes with some shortcomings, the major one being that it is not a hundred percent reliable since technically the money that goes in is not that which goes out. The amount going in now, for instance, is what is being used to pay the benefits of the older folk, and what the future generations will be taxed is what will be used to pay the current generation and so on; if it happened then, that the money coming in is not as much as that going out, which would bring about issues in equal payment. Besides, since it is a Pay as You Earn System, people who earn less will continually live the same lifestyle even in their old age since the benefits given are equivalent to their contributions.

Goodness

The social security system ensures that people do not end up in poverty in their old age and ensures that unexpected turns in life are prepared for in advance, such as when people become disabled and can no longer work. No one can anticipate instances such as disablement, but the social security act ensures that these people are taken care of when this happens.

The Collapse

There is truth to the prediction of the collapse of the social security system. This is because workers' ratio to people going on retirement is low, which translates to less input and more output. The rise in mortality rates has brought about challenges as people are collecting benefits for more extended periods. This, contrasted with when the program was initiated, where the mortality rate was low, makes it hard to balance the financial equations (Diamond & Orszag, 2006). With such trends, the social security system is bound to collapse as its survival solely lies on the balance between money going in and out.

Factors Leading to Problems in the Social Security System

Technological advancements: Since such improvements make work more comfortable, they pose a problem to the older generations. Conventional face-to-face methods may not work all the time, for example, in a time like this when social distancing is being encouraged, and the older people may not be able to use this technology. Data also needs to be digitized, and that comes with the risk of being altered or corrupted.

Workers who have migrated from other countries. These are usually not included in the social security program even though they contribute a lot to the economy. As a result, the workers paying into the system are less than the retirees receiving benefits, which causes imbalance is. The older generation is more likely to be faced with health challenges, some of which may not be anticipated, such as chronic issues leading to disabilities. Regardless, they are taken care of by the social security system, which leads to deficits in the money planned to be given out (Baker & Weisbrot, 2001).

The proposed reforms are likely to improve the system and ultimately prevent collapse, as they are solutions being offered to the current social security problems.

Conclusion

Some of the individuals may not conform to the reforms being proposed. They view them as highly unreliable. This is how some of them, such as increasing taxes and taxing an individual based on their gross income, would inconvenience the middle and low-income earners. Most of them rely on their income, and taxing more from them would worsen their social welfare.

Some reforms, such as increasing the retirement age to 70 by the year 2040, are long-term and will not help the situation. This creates an overload in the employment sector, although social security funds will increase. There is high absorption of young individuals seeking jobs, but the rate of retirement is significantly low.

References

Baker, D., & Weisbrot, M. (2001). Social security: The phony crisis. University of Chicago Press. https://books.google.co.ke/books?hl=en&lr=&id=-bMWxdFzibMC&oi=fnd&pg=PP11&dq=Baker,+D.,+%26+Weisbrot,+M.+(2001).+Social+security:+The+phony+crisis.+University+of+Chicago+Press&ots=1eJ4QIC_Z8&sig=qXrxnbdzkO6nrzbiO_Q49t4DEr0&redir_esc=y#v=onepage&q=Baker%2C%20D.%2C%20%26%20Weisbrot%2C%20M.%20(2001).%20Social%20security%3A%20The%20phony%20crisis.%20University%20of%20Chicago%20Press&f=false

Diamond, P. A., & Orszag, P. R. (2006). Saving social security: A balanced approach. Brookings Institution Press. https://books.google.co.ke/books?hl=en&lr=&id=X3nRNgQb0CwC&oi=fnd&pg=PP1&dq=Saving+Social+Security:+A.