The U.s. Economy Operates On A Fundamentally Capitalistic Reward Based Principle

Stephen Goss, the Chief Actuary of the Social Security Administration once said, “The concepts of solvency, sustainability, and budget impact are common in discussions of Social Security, but are not well understood.” Social Security is an important federal program that provides a stable source of income to individuals who no longer have a constant salary due to retirement, disability, or death. This program, not only keeps millions of families out of poverty, but it also plays a vital role in the national economy. According to the research report, “Social Security’s Impact on the National Economy”, by Gary Koenig and Al Myles, Social Security supports millions of jobs. The importance of this program is clearly evident in both the national economy and in the economic stability of each individual state. However, the future of the Social Security program does not look very stable and the right decisions need to be made in order to ensure the solidity of the nations’ economy.

This lack of “support systems” is why the poor ultimately fail to advance. Throughout the last decade the federal government has issued billions of dollars into work supports, but due to unorganized tactics they have failed at eliminating poverty, “law makers have poured billions of dollars into ‘work supports’ such as child-care subsidies and employment tax credits. Yet no one in Washington seemed to think about assembling these services in a coherent package that would be accessible and convenient to struggling workers” (The American Prospect). The answer, according to Sharon Parrott, director of welfare reform and income support division at the Center on Budget and Policy Priorities, “says it [policy] would have three components: convenient one stop service centers; streamlined application forms; and generous income ceilings so that a working parent doesn’t lose eligibility for, say, health insurance the minute he or she climbs above the poverty

Our country is quickly turning into a welfare state; this process by which the government takes more and more of our income and thus the benefit of our work for the common good doing this deters people from working for themselves to achieve a better life at all. This self perpetuates simply by the fact that if you’re not working then you becoming one of the multitude of individuals needing help. Requiring people to work twice as hard to reap a certain level of benefit is a stifling concept those without the fortitude to do this will simply accept a meager existence and be sustained upon the handouts given.

Today the United States faces many challenges, challenges that mirror the changing world we live in as well as the changing dynamics of our country as a whole. There is more than a few issues on the horizon for America, and many of these issues can be tied directly to government expenditures. Not the least of which is our current position on social security spending; arguably becoming the largest Ponzi scheme the world has ever seen. However, it is the details that really accentuate the complexity and scale of this ever growing budgetary concern. In 2012 social security spending totaled 819.7 billion dollars. Making it the number two largest expense in the in our government spending structure, second only to defense by a

United States federal budget. Social Security is the largest entitlement program in the United States. In 2013, the total Social Security expenditures were $1.3 trillion, 8.4% of the $16.3 trillion GNP (SSA.gov). There has been an issue in the White House of either opposing the cut in Social Security spending or advocating for a hike in payments. Expanding Social Security instead of reducing it would benefit seniors, especially considering America’s struggling middle class and that there are more impoverished people than ever before.

Throughout both in-class discussions, and David Shipler’s “The Working Poor: Invisible in America” we learned being poor in America is anything but easy. Even with all of our government assistance programs such as Medicaid and Welfare, many family generation after generation seem to fall below the poverty line and create a life of struggle and long way out for their families. When Shipler is explaining different families and their lac of self control in saving the little money they do earn, it makes you question if the have the know how to get out of poverty, or even in some cases even want to due to their different spending habits than successful people, falling into credit traps, and buying the un-necessary.

To fund these programs, individuals and employers are liable for FICO taxes. Both parties are taxed at a rate of 6.2% on income under $118,500 and an additional 1.45% tax on all income for Medicare. Social Security has been a debated issue in American politics as the life

The Social Security Act (SSA) of 1935 was drafted during the Great Depression as part of President Franklin D. Roosevelt’s New Deal. The SSA was an attempt to limit what were seen as dangers in the American life, including old age, poverty, unemployment, and the burden of widows and fatherless children. The SSA was intended to provide a minimal level of sustenance to older Americans, saving them from poverty. By signing the Social Security Act, President Roosevelt became the first president to advocate federal assistance for the elderly. The SSA provided benefits to retirees and the unemployed, and a lump-sum benefit at death. Payment to current retirees are financed through payroll taxes on current workers’ wages, half directly as a payroll tax and half paid by the employer. The SSA also gave money to states to provide assistance to the elderly, health care, maternal and child welfare, and assistance for the disabled and blind. In 1965, Congress expanded the system to include

Special Trust Funds were invented for the dedicated revenues, and the benefit were pay from the currency in the Social Security Trust Funds. Throughout the years, almost nine trillion has been paid into the Trust Fund and a few more than seven trillion had been paid benefit to recipients. The funds paid to SSA are continued to be placed in Trust funds and will be used to pay future benefits.

In a 1942 message sent to congress from FDR, he stated that he believes “No American citizen ought to have a net income, after he has paid taxes, of more than 25,000 a year.”. To institute this, many different tax laws were set in place, including a 91% personal income tax rate, and even a corporate excess profit tax of 95%. He tried to impose a tax of 100% on anything made over that $25,000 limit, which was enough to easily live on, but it also showed what type of president FDR was, and many people were disgusted by the idea of the government being able to regulate how much money you can make. On Top of this tax, FDR’s administration instituted social security tax, which on paper worked well, failed to meet its goal when it was actually implemented. The original idea of social security was that money would be taken out of your check and put into a fund, which would then help pay for your retirement when that time finally came in your life. The problem was that government couldn’t keep there hands off of that unused funds, and eventually realised the fund would only be able to pay for those currently retiring, relying on the younger working generations to pay for the older retirements, assuming there will always be more people working then there are in

The Welfare System’s Desperate Need for an Overhaul According to census.gov, 21.3 percent of people in the United States took part in the use of welfare programs each month in 2012 (Virginia Hyer, 2015). Even though the heart of the welfare system is genuine and pure, the heart of the most promising nation in the world has ultimately become too lazy to live a fulfilling life and dependent on the hard work of others to provide its needs. “The land of opportunity” has lost its passion; instead of chasing dreams and success, our nation seeks the easy way out of nearly every task especially in the workforce. Everyone wants to live a promising, financially stable life, but no one wants to work for it.

is approved, it would do nothing to solve economic problems, and would actually make it worse(Social Security Act."2015). The trust funds are destined for insolvency because the program's cost is increasing at a faster rate than revenue from payroll taxes.

Since the very implementation of Social Security in 1935 during the time of the Great Depression to present day, it has been a never-ending source of controversy. As mentioned by Nancy Niles, Social Security was considered “old age insurance” (Niles, 2011, p. 9). It was designed to help older Americans, workers who become disabled, and families in which a spouse or parent dies (Niles, 2011). Not only has Social Security played a very essential role in the lives of many Americans throughout the years, but has also been very important to the economic security of the United States of America.

Every American dreams of finding a job that pays well enough so that they may comfortably take care of their loved ones and themselves for years to come. Most Americans hope to find some way to make a living that they enjoy, something that they view as productive. Unfortunately, many do not have this luxury. In our society, a good portion of the population is forced to hold the base of our country in place while hardly being redeemed for their time and effort, and thus the problem of income inequality. Numbers of these people live from paycheck to paycheck, barely getting by, not because they manage their money poorly, but because the value of their time at work is negligible.

(5) Currently SS funds are collected and distributed on a pay - as - you -go (PAYG) system in which Social Security taxes from individuals are immediately distributed by the means of the SS Administration as it sees best fit. This means that taxes collected are not reserved for the individual who has paid them: in Rose 2 the current state he or she must rely on those persons paying SS taxes during the time of their retirement (Becker). For a number of these characteristics and future issues, the Social Security System must be reformed or completely abolished to meet the needs of tomorrow. The leading concerns of Social Security that merits the immediate initiation of reform are the demographic and economic circumstances in the coming century. Even though "forecasting the economy and budget over such a long period is uncertain" there remain many "certainties" regarding problems facing Social Security in the first half of the 21st century (OMB, Budget Perspectives 23). The Federal Government's responsibilities extend well beyond "the five- or six-year window" that has restricted the focus of recent budget analysis and debate. Of these "certainties" are the mounting challenges posed from the baby-boomer generation. This generation, born in the years after World War II, is aging