Social security is the largest welfare program in the country, with 725 billion dollars going into it last year. Why then, is the program running out of money? The question is, what will become of Social Security by the time it's our turn to benefit from it? According to Samantha Wedner of Yahoo News, "Social Security keeps roughly 40 percent of all Americans aged 65 or
older out of poverty. For 26 percent of retirees, Social Security is
their only source of income."
The problem is, the money that workers pay toward Social Security isn't saved until we retire so that we can use it. Instead, it's used for the payments of the current retirees. The logic is that by the time the generation retires, there will be a new force of young workers there to pay for our Social Security, just as workers today pay for the older generation currently benefiting from it. However, as people retire at a record rate, there are just too many to keep the system afloat. In 1950, there were about 7 workers per retiree. Today, there are about 4.5, and experts believe that in the next 30 years that number will drop to only 2.6. There is simply no way that the Social Security payments of 2.6 people can support a retiree. The concern is that when we get older, there will be no money left to support us, even though we'll have been making Social Security payments for years by that point.
What do you think we should do about this issue? Politicians always make promises about their plans for social security; do you think their plans will be effective? I sure don't want to pay a chunk of my income to Social Security, only to watch the program collapse.
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8 comments:
Social Security is obviously a big and complicated issue, as Mark said. I think that its obvious that some changes need to be made, and made soon, but of course it is ridiculous to get rid of it entirely. There actually are a lot of possible solutions going around, (all very complicated financial stuff,) which could be viable, the trouble is, no politician wants to be the one to take any part of social security away from their constituents, even if it's practical.
Social Security was a revolutionary idea which came from the New Deal. From the age I was able to understand social security, I found it a flaw system. Social Security is a system that sounds really good on paper, but does not work in practice. Eventually the ratio of workers to retired people will become closer to 1:1 as we take a limit of time. As technology improves people can artificially live much longer. Also, another flaw of social security is spikes in birth. The baby boomers are starting to collect their social security putting even more strain on the system. The only way to actually get the system to work would be a long list of reforms.
Social security definitely needs reform, but reform has been locked in partisan battles ever since the program was first conceived. It seems inevitable that we will need to reduce the money going into social security which will translate into a reduction of benefits for retirees. Everyone always has something to lose when it comes to changing social security and I doubt that any major reform will come any time soon. Ultimately, this highlights some of the weakness of the modern welfare state, where a government takes it upon itself to support the welfare of its citizens. If we were really serious about cutting government spending, then people would have to accept reduced benefits which are a privilege, not a right. Some of the rhetoric in the presidential campaigns tells us that we are not willing to accept this, since both candidates were accused of trying to destroy medicare by the other side.
I just watched an interview on CNN with Piers Morgan and Tim Pawlenty and they talked about how a bipartisan compromise can be made in time to avoid the fast coming "fiscal cliff" (from my understanding this means some very bad stuff will happen to the economy like the GDP dropping). I think Pawlenty was talking about how the democrats will have to look into entitlement reform in order to pass a bipartisan agreement. From what I gathered from that interview it seems like both partisan sides will have to have some sort of sacrifice, possibility equating to a social security reform.
The fact of the matter is that when it comes to reforming social security, no one will be very happy--retirees will lose some of the money they've come to expect, and those who have not yet retired will be forced to take more initiative in regard to funding their retirements. These sacrifices seem to be a large part of the reason none of the reform that is needed has been implemented: the transition would simply create too much disquiet among the American people. However, whatever flaws there may be with reforming social security, delaying fixing this broken system will do far more harm than good. It is far preferable to upset the American people (which is almost guaranteed to happen when any policy touches social security) for a brief time than to allow this system to continue until it creates even greater economic woes.
Like Rachel and Shannon said, the main concern of politicians is to keep their constituents content, even if it means deviating from a solution. However, this is a situation in which Democrats, Republicans AND all other Americans (ie. the retirees and the workers) need to compromise. The bitter truth is that the current system is flawed, and refusing to budge in order to satisfy the current beneficiaries will only exacerbate the issue. President Obama has mentioned bipartisan reform as a means to amend Social Security. With the elections out of the way, perhaps this reform will come to being.
I really liked Shannon's comment that change needs to be made with the risk of temporarily angering the public in order to benefit the people of America in the long run. I am sure that a lot of people are aware of the flawed Social Security System, but it is natural that they will fear any change. In the end, however, a change is vital and I also hope that President Obama becomes aggressive in reforming this issue and force the public to change. It's kind of like Facebook and how they change their website's layout. Once a change is made, people will complain, but in the end, they will become comfortable with it and accept it.
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