Social Security As An Insurance Program example essay topic

... riv ate insurance firm, can guarantee that it will exist well into the future, and will have the continued income of the Social Security tax to draw upon, it can make on-the-spot adjustments for changes in the inflation rate. Some adjustments, in fact, have been automatic in the recent years, therefore relieving the pensioners of the periodic worry of whether this years benefits would be adjusted, or whether the level of payments would remain stable, thereby, relative to the cost of living, making them poorer that ever before (Stein p. 28). In the face of the government's ability to make those necessary adjustments and to continually finance the Social Security program, many opponents of the system argue that the government programs are driving out the private insurance industry. The statistics remain otherwise. SOCIAL SECURITY FINANCING The social security tax is one of the fewest taxes in the United States, and the only federal tax in the country, that is given for a specific purpose. All other taxes are put into another fund, so that welfare programs, defense, space projects, and the other categories of government spending are all financed from one giant, un categorized bowl of tax revenues (bosk in p. 62).

When the Social Security system was first established, it was felt that a direct payroll tax, based on the pay of the worker and paid both by employer and employee, would be the fairest way for the people that were currently working to pay benefits to those who weren't working, as well as to provide for some future requirements and disabilities. Therefore, a specially constructed payroll tax was used to fund the program. By measuring the amount taken in by the tax to the amount, not only that is taken out, but to the amount that will be taken out in future years, opponents of the Social Security system make the case that the system will be unable to keep itself in such a manner indefinitely. And, if Social Security were a private insurance program, it wouldn't. But the fact is that Social Security is not a private program. it is funded by the government. Further, the government is in a unique position to change the laws of commerce and contract to adjust the system, making it more responsive to the needs of the retired, which, in turn, would reduce their need for the Social Security benefits.

For example, the United states Government should raise the mandatory retirement age. By raising the age to sixty-eight, the Social Security System could delay paying out benefits for several years to thousands of people, saving the system a significant amount of money in benefits. For these reasons, the government is in a position which cannot be compared to private industry. In this sense, looking at social security as an insurance program and comparing it to other insurance programs in the private system could easily give the impression that the system is gong bankrupt, when in the reality it isn't.

THE FUTURE OF SOCIAL SECURITY The thing to keep in mind about the Social Security system, then, is this: the system itself is in no fundamental danger of collapse. There is only temporary, cash flow situation that must be carefully looked at. The federal government pays out 4.5 billion more in Social Security benefits as it collects in taxes every year. In fact, $4.5 billion is a small price, compared to the other programs the federal government now finances from general revenue.

Besides tapping the general revenue fund and raising the retirement limit to 68 or even 70, the government has the option of raising the Social Security tax or even reducing the benefits slightly. The government has so many options with regard to financing the benefits that the question becomes of the cash management, not quite as significant as the huge deficits that the Social Security has been accused of having. The government is already under way to help alleviate this cash flow problem. Public officials have debated which of the various ways would help best serve the public interest, and legislative action has been taken that would ultimately result of the Social Security system to a positive cash base. This shift would provide the workers of America with the same benefits they have been guaranteed since 1935- and have been paid, and expanded ever since. The social security system has withstood forty years of changing economic conditions and greater concern of public welfare.

What would replace the system, if the critics had their way? SOCIAL SECURITY PERSPECTIVES The social security system has saved an untold number of people from disaster throughout many years. Many of the nations old people- some as young as sixty-two, a few over a hundred, live from Social Security paycheck to Social security paycheck, with this government program as their livelihood. There can be no doubt that social security has made a tremendous effort to alleviate a lot of suffering that has occurred, even in recent times. The Social Security act was one of the cornerstones of Roosevelt's new deal program, and it is one of who's necessity has been proven, and whose usefulness has allowed it to live. Like all the other new deal projects, Social Security was never meant to show a financial profit, It was meant to show a profit only in the amount of human suffering, It was able to lift.

The social security program cannot be measured in the same manner that a private program can be evaluated in, because it is a governmental welfare program. which doesn't mean that it acts in competition with private programs, that was never its intent. The social security administration has written: 'Today the American economic system has produced relatively full employment, widespread ownership property, and a rapidly increasing standard of living for the majority of Americans. It has developed a threefold structure to prevent economic insecurity: a public social objectives, mutual protection through private employee-benefit plans to bring the added strength of voluntary of group action: and private savings and other individual action to achieve the greatest range of choice'. One only has to look at the number of people, and the amount of money, that those who are recipients of Social security effect, and the advantages of Social Security become obvious: it has taken a group of people who have traditionally been a financial burden on society, and provided a program that they have contributed a little to their own financial well being. the amount of dignity and self respect these people have gained cannot be measured in dollars.