How can we Prevent the Fall of Social Security?

Christina Wood

Mr. Aparicio

Econ – morning

18 June 2017

Honor bound

How can we Prevent the Fall of Social Security?

            Social Security—a federal insurance program that provides benefits to retired people—has quickly taken a toll for the worst throughout the past few years. The problem began during the Great Depression when thousands of elderly people were completely broke and depended on their families or friends for support. In 1934 the government, specifically Franklin Roosevelt, decided to respond by giving every elderly person over the age of 65 an average of $19.74 a month per person. [1] But how would the government get the money to give to the people over the age of 65? In Naked Economics, Charles Wheelan answers this question by saying that the government decided to make it a “pay-as-you-go” program, which means that “the money does not get invested somewhere that you can draw on it in twenty or thirty years late…Rather, that money is used to pay current retirees”. [2] To this day, the main issue with Social Security is the ratio of retirees to workers. After World War II, many people began to have children at rapid speeds; these kids were called the baby boomers. Since there was a time period of many children being born at the same time, this caused long term issues for the social security program. Because of these baby boomers, who are gradually retiring, the ratio of workers to retirees is now three workers to every one retiree. [3] Soon there will be even fewer workers to ever retiree, which bring us to the main question; how can we fix the problem before social security runs out of money completely? Charles Wheelar portrays through his book two paths that he believes can fix the issue: we can take more from current workers or raise the age for the retirees. [4] Since there are too many retirees to workers, we, as workers, are required to pay 6.2 percent of our earnings towards social security taxes. [5] Gradually the numbers will get higher which means that we will also gradually have to put a larger percentage of our earnings towards social security taxes alone. Many people are already infuriated with the amount that we are having to pay today, it will only get worse as time goes on. The second way that we can try to fix the problem is by raising the retire age. As of right now the retire age is 65, but the government would like to raise this age to 67 or older. This could be a good or very bad thing it all depends on how long people are predicted to live. If people are predicted to die at the age of 70 and the age to be eligible for social security is 65, then people would only get money for five short years. Overall, whether the government decides to increase taxes towards social security or increase the eligible age for social security, there will always be some people who are not happy or disagree with the decision made.

 

 

 

 

 

 

 

 

Work Cited

[1] “Social Security.” Social Security History. Accessed June 19, 2017. https://www.ssa.gov/history/50mm2.html.

[2] Charles Wheelan, Naked economics: undressing the dismal science (New York: W.W. Norton & Company, 2010).

[3] “Social Security.” Social Security History. Accessed June 19, 2017. https://www.ssa.gov/history/50mm2.html.

[4] Charles Wheelan, Naked economics: undressing the dismal science (New York: W.W. Norton & Company, 2010).

[5] Charles Wheelan, Naked economics: undressing the dismal science (New York: W.W. Norton & Company, 2010).

 

 

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