What is the future of Social Security? 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 contribute through payroll deductions, then get money back after you retire. Nonetheless, Social Security is a complex and intricate communal program. By design, Social Security involves massive subsidies from the next generation of retirees to the present, from single workers to married couples. Now that the gigantic post World War II baby boomers generation approaches retirement age, there is concern about the consequences it will have on Social Security. There are basically three options, we can do nothing and allow Social Security to run it's course, revise Social Security, or consider privatization of the system.

Historically, the Democratic and Republican parties have clear and opposing viewpoints. Quite simply, the Democrats whole-heartedly oppose change to a program initiated under Roosevelt's New Deal. The Republicans consider this social program contrary to capitalism. However, over time the Republicans learned that it's popularity with the voters has made this issue untouchable. According to Congressman Richard Gephardt, the social security was not meant to be the sole source of retirement income but rather as a foundation for retirement to give all working Americans a safety cushion. There will be money in the fund until 2029, so distressing baby boomers don't have to worry.

After that money is depleted the revenue from the payroll tax will be sufficient enough to pay 75% of every social security benefit for the subsequent 75 years. But how many burdens should be put on the young and middle age individuals, whose taxes basically pay for government retirement benefits? Sooner or later, cuts in Social Security and Medicare are unavoidable because the alternative major tax increase or budget deficit is far worse. In general, we know what to do: raise retirement ages, tax social security benefits fully, shift Medicare towards 'manager care' and correct social security benefits for an over statement of inflation. Naturally, changes need to be made gradually so that today's retirees are the individuals affected.

The most practical solution is a mix of tax increases and benefit cuts. This way all generations would be asked to contribute. Privatization is the most controversial argument in this sector of government. Many citizens believe that they should be allowed to make investments on their own rather than having the government perform this for them. These people believe that by doing so they have more control over their future and more autonomy from the government. Furthermore, they stress that privatization will increase competition, which is the basis of our free market capitalistic society.

Many other communities in accord, feel that by investing privately what they are now paying in Social Security would raise economic growth and increase retirement incomes. For the past several decades, the average yield on private stock has excited inflation by seven percent compared to treasury bonds that only exceeds inflation by 2. 3 percent. Alternatively, all plans to privatize social security come with an adverse effect. Most noticeably, is the tax increases which are necessary to make privatization work in view of the fact that payroll tax revenues are not adequate to pay both benefits today and the build up of reserves in new personal accounts. As we all know tax increases are not good ways to make friends.

However, supporters of privatization argue that public confidence in social security has decoded so far that the only way to restore worker's faith in the system is to give them control. They say that privatization alone can strengthen the safety net and restore the long-term solvency of the system without increasing taxes. Nothing about privatization suggests that workers must invest entirely or heavily in stocks. Those concerned with security would be free to invest more heavily in fixed income instruments. All privatization proposals retain a basic safety net for the elderly; this safety net can take various forms.

In Chile, for example, the government 'tops up' investment accounts for older workers with small lifetime accumulations to ensure a minimum retirement annuity. Regulatory structure also protects workers from other performing pension funds. More generous 'guarantees' are possible, but at the greater cost for workers. American workers would be better off if they were permitted to invest a portion of their social security taxes in private stocks and bonds. This has been an accepted compromise by all sides of the debate, yet it has not been implemented. Although Social Security is arguably the U.

S. government's greatest success story, keeping nearly forty percent of the elderly out of poverty while giving millions of future retirees something to look forward to, there still is a major issue at hand. What leg does it have to stand on after the boomers are all taken care of? Respectfully, this system has had overwhelming results but at who's cost. As an alternative to destroying a system that took sixty years to build, we should start a sensitive reform that ensures social security will be there for American families for generations to come, which in essence, needs to start now. Using a conservative economic projection should be one of the steps taken for the growth of future social security. We all know there are no free rides in life; someone is always taking the bill, much less in social security.

Any of the changes discussed in this report would impose a real alteration in the level of benefits, taxation and risks. Ultimately, we need to look forward with complete understanding and full acceptance of changes, while keeping faith in a system, which has served us so well. Richard A. Gephardt, Being Careful with Social Security [article online], Newsweek Inc. Accessed 15 January 1997; Page A 19. Social Security Administration.

Available from web Robert J. Samuelson, Justice Among Social Security [article online], Newsweek Inc. Accessed 1 July 1998; Page A 23. Social Security Administration. Available from web.