Social Security Privatization Research Paper

On August 14, 1935 in Austin, Texas, President Franklin D. Roosevelt inked his signature on the Social Security Act. It was originally implemented to resolve problems with unemployment, old age insurance, and public health and welfare. The Great Depression was the catalyst for the creation of the Social Security program, and the basic structure was very similar to Germany’s social insurance programs from the 1880s. Today, social security is mostly used for retired senior citizens starting at the age of 62. At 62, American citizens can begin to collect, but will only receive 35% of their monthly benefit due, rather than the maximum amount of 50% when they reach the full retirement age of 66. (cite) In addition, social security is dispersed to about 14 million disabled people under the age of 62, who can no longer work in the labor force for various reasons. The people who qualify as disabled are just a small percentage of those collecting compared to senior citizens, and are often not mentioned when social security issues are brought up because of their minute effects on social security distribution.

In the United States of America, there exists a two-party system comprised of the U.S. Democratic Party and the U.S. Republican Party. Although these two parties have become somewhat neutral on many issues of national policy, each party has a unique perspective of how the ever-looming Social Security problem should be alleviated. First, the U.S. Democratic Party believes that in order to fix the Social Security problem, pension plans must be reformed and savings incentives must be expanded nationwide. Also, the U.S. Democratic Party has persistently argued against the recent idea of privatizing Social Security. On the other hand, the U.S. Republican Party believes the Social Security system is in need of much more drastic change. According to statistics provided by the official website of the Republican National Committee, "Under the current system, today's 30-year-old worker will face a 26% benefit cut when he or she reaches normal retirement age." Also according to the RNC website, "By 2041, when workers in their mid-20s begin to retire, the system will be bankrupt - unless we act now to save it." In order to fix this troubled system, the U.S. Republican Party believes that the only answer is privatization.

In “The Social Security Problem”, Max Moore discusses the fearful reality of Social Security running out of funds. He states that the U.S. Department of the Treasury predicts that Social Security funds will run out by 2041 and action must be taken in order to prevent this (134). In his essay, he explains how the depletion of Social Security funds are a result from a decreasing retirement age, decreasing fertility rate, and shrinking work force. These things contribute to an increased population relying on Social Security, an increased population of the elderly, and a decreased ratio of workers paying for those beneficiaries (135). Moore explains the proposal of George W. Bush to make Social Security partially privatized; allowing young workers to invest their retirement savings into their own account. This would result in people putting their retirement on the line in

It’s a matter of either losing all that you have worked for and live in poverty when retired or allowing your hard earned dollars to grow and have a secure comfortable retirement. I believe that Social Security is a doomed Government Program and that Privatization of Social Security would allow for a more secure retirement plan for all Americans. Social Security was first created to help aging Americans in their senior years so they would not end up in poverty. Social Security was signed in as law on August 14, 1935 by President Franklin D. Roosevelt and was fully operating by 1940 (SSA). Originally a retirement program, but Social Security now includes survivor benefits, disability benefits and Medicare and all together is the largest

Those who think that privatizing social security will benefit the citizens who receive it are very wrong. The reason that they think that it will affect social security is because by creating private accounts, it will cause the separate interest rates for the individual person to go up or down depending on the person. This of course is unnecessary because the way it is set up right now, the individuals are receiving benefits that work for the certain situation that the person is in. Many retired citizens are not in financial crisis because of this setup, because there is nothing that is wrong with it. In the last couple of decades social security has completely transformed the way that elderly citizens in our country live their lives. According to Mortimer Zuckerman “roughly two thirds of people over 65 and older depend on social security for at least half their income, and roughly 20 percent rely on it for all their income.” These are pretty promising numbers regarding the way that the American seniors are spending their

Currently, the United States is contemplating at a forthcoming Social Security crisis. If changes are not forged, the Social Security system will not be able to keep up with the demanded payouts and is estimated to empty the trust fund around the year 2037. In this paper I will review a brief history of the Social Security program, touch upon the eligibility requirements, discuss what economists believe about the future of the Social Security Program, and finally state the Pros and Cons to the proposed raising of the age requirement for minimum payout.

Privatization of the United States Social Security system could actual be more efficient than the publicly operated system. Chile switched its public retirement system to a privately ran system to a less expensive system that has been fairly successful (Bosworth). Social Security privatization is overall a better option because it will increase the rate of the returns of its recipients. American 401K invested in US treasury bonds received between a 1.9% to 4.2% rates of returns while the average person born in 2004 will receive a rate of return of 1.7% (Bosworth). These bond options are as stable as a regular Social Security option is because both are provided by the government but a privatized account allows workers to pick higher yielding accounts. Privatized accounts allow for workers to also invest in the stock market at a higher risk reward basis. Survivor benefits from the death of a family member who paid into Social Security received from 75% to 71.5% for at least 10 years (Survivors Planner). This is the main flaw of the current Social Security system is that the result of an early death, the worker's family is at a significant disadvantage economically as well as emotionally. This lead to the main argument brought up by Barry Bosworth chair of international economics and Gary Burtless chair of senior fellow economics that the privatization of Social Security

It’s a matter of either losing all that you have worked for and live in poverty when retired or allowing your hard earned dollars to grow and have a secure comfortable retirement. I believe that Social Security is a doomed Government Program and that Privatization of Social Security would allow for a more secure retirement plan for all Americans. Social Security was first created to help aging Americans in their senior years so they would not end up in poverty. Social Security was signed in as law on August 14, 1935 by President Franklin D. Roosevelt and was fully operating by 1940. Originally a retirement program, but Social Security now includes survivor benefits, disability benefits and Medicare and all together is the largest

By looking at the ratio of young to elder citizens at that time, idea of providing benefits to retirees from young employees’ taxes was logical. Only thing that Roosevelt was unaware of was the period of “baby boom” that was going to create trouble in the future with providing benefits. With the retirement of “baby boomers” in around 2018, real crisis will start for Social Security Administration with providing higher amount of benefits from lower amount of incomes.

It is about eighty two years since Franklin D. Roosevelt signed Social Security Act. FDR stated “We can never insure one hundred percent of the population against one hundred percent of the hazards and vicissitudes of life...we have tried to frame a law which will give some measure of protection to the average citizen and to his family against the loss of a job and against poverty-ridden old age.” The social security plan had established itself as one of the most popular federal program. The program covers retirement, disability, and survivors’ benefits although to quality for most of the program’s benefit there must have been contribution from the receiver. In 1935, the Social Security Act became an actual law and with several amendments

Firstly, opponents of Social Security privatization worry there are many risks involved. They worry about risks associated with investing in the stock market.They believe this because investors are not able to accurately predict what the market will do next. According to a researcher at the Cato Institute, a research organization on public policy, Michael Tanner, states there have been many big drops in the stock market over the years. Nobody is certain what it will do next (1). The market could be up one day and down the next like a rollercoaster at an amusement park. Many people do not want to privatize Social Security because investing in the stock market involves many risks, especially if all the money invested is intended to last throughout retirement years. There is no guarantee any money will be made. Many people also have the chance of losing large sums of money. People are FRIGHTENED (sad) they could lose their safety net and have no money left. Some people also believe it could be risky to involve the government with the stock market. A database that specializes in business, political, and government debates believes, if the government were to become involved with the stock market it would “undermine basic free market principle and impair the economy” (“Social Security Reform” 1). Some people are afraid the government would become too involved and control what is PRESUMED (believed) to be a free market. It could corrupt the stock

     There is much-heated debate on the issues of Social Security today. The Social Security system is the largest government program of income distribution in the United States. People are concerned that they won't see a dime of what they worked so hard to contribute into the Social Security system for so many years. Social Security provides benefits to about forty-three million Americans. Not only to retired workers, but also to their spouses and dependents of the workers who die prematurely. It also provides benefits to disabled workers and their dependents. Social Security appears to most people like a simple retirement saving’s account. After all, you generally

Recently there has been an argument regarding the social security system. It has been suggested that privatizing the system would provide more benefits. Privation plans are based on a simple idea (Bosworth and Burtless). Private pension system can boost returns which would help with retirement. The private pension system is also flexible (Kimmons). By moving towards the private pension system it can boost national savings and economic growth (Bosworth and Burtless). The current social security system should be replaced by a mandatory pension system.

The Social Security System is in need of a new reform; our current system was not designed for the age stratification we have at this time. The U.S. Social Security Administration Office of Policy states, “The original Social Security Act, signed into law on August 14, 1935, grew out of the work of the Committee on Economic Security, a cabinet-level group appointed by President Franklin D. Roosevelt just one year earlier. The Act created several programs that, even today, form the basis for the government's role in providing income security, specifically, the old-age insurance, unemployment insurance, and Aid to Families with Dependent Children (AFDC) programs.” Social Security was modeled to aid the elderly citizens, however during the

A little over 60 years ago the nation struggled through what was, up to then, the most dramatic crisis since the Civil War. The economy was uprooted after the crash of the stock market and the country's financial stability destroyed. One of the many steps taken to alleviate the burden on the American people was that of the passing of Social Security Act of 1935 and its amendments by Congress and the President, Franklin D. Roosevelt. Under the provisions of the Act, the government would take on the responsibility of taxing the income of all working Americans and returning the money through numerous public benefits and programs. Now the nation faces an economic and political problem with the program