Social Security System Y example essay topic

The 2004 Report of the Social Security Trustees is in; but the jury is still out 'y arguing the findings of the report. Agree or not, the masses have a good idea of 'y the final ruling and they all agree that the current state of the social security 'y system has suffered, for a very long time, from an ongoing deficit problem that 'y will continue to grow unless immediate steps are taken to address the problem. 'y People, on both sides of the fence, argue in support or against the president's 'y proposed plan to save the Social Security system. Yet, they all concede and 'y acknowledge that in reality a problem does exist; and unless calculated 'y measures are taken, this problem cannot be controlled and will snow ball the 'ySocial Security System into bankruptcy. ' the Social Security system was designed in 1935 for a world that is very 'y different from today. In 1935, most women did not work outside the home. Today, 'y about 60% of women work outside the home. In 1935, the average American did 'y not live long enough to collect retirement benefits.

Today, life expectancy is 77 'years. (2004 Report of the Social Security Trustees, p. 81) Benefits are expected 'y to rise dramatically over the next few decades. Because benefits are tied to wage 'y growth rather than inflation, benefits are growing faster than the rest of the 'y economy. This benefit formula was established in 1977.

As a result, the current 20-year old contributor is promised benefits, which are 40% higher than what will 'y be paid to seniors who retire this year. However, the current system does not 'y have the money to pay these promised benefits. Furthermore, the retirement of 'y the Baby Boomers will accelerate the problem. In just 2 years, the first of the 'y Baby Boom generation will begin to retire, putting added strain on a system that 'y was not designed to meet the needs of the 21 century. By 2031, there will be 'y almost twice as many older Americans as today, a drastic increase from 37 'y million today to 71 million. 'y Currently, there are fewer workers to support our retirees. When Social 'ySecurity was first created, there were 40 workers supporting every one retiree.

At 'y the same time, most workers did not live long enough to collect retirement 'y benefits from the system. Since then, the demographics of the society have 'y changed dramatically where people are living longer and having fewer children. 'yAs a result, there has been a dramatic change in the number of workers 'y supporting each retiree's benefits. According to the report: 1. ' y In 1950, there were 16 workers to support every one beneficiary of Social 'ySecurity. 2. ' y Today, there are only 3.3 workers supporting every Social Security 'y beneficiary. 3. ' y Moreover, by the time the current youngest workers turn 65, there will be 'y only two workers supporting each beneficiary. (2004 Report of the Social 'ySecurity Trustees, p. 47) 'ySocial Security is heading toward bankruptcy. According to the Social 'ySecurity Trustees, thirteen years from now, in 2018, Social Security will be 'y paying out more than it takes in and every year afterward will bring a new 'y shortfall, bigger than the year before. When the young workers of today begin to 'y retire in 2042, the system will be exhausted and bankrupt.

(Summary of the 2004 'report of the Social Security Trustees, p. 1) If immediate action is not taken to 'y save it, the only solution will be drastically higher taxes, massive new borrowing, 'your sudden and severe cuts in Social Security benefits or other government 'y programs. As of 2004, the cost of doing nothing to fix the Social Security system 'y had hit an estimated $10.4 trillion, according to the Social Security Trustees. (2004 Report of the Social Security Trustees, p. 58). The longer we wait to take 'y action, the more difficult and expensive the changes will be. 1. $10.4 trillion is almost twice the combined wages and salaries of every 'y working American in 2004.2. ' y Every year we wait costs an additional $600 billion.

(2004 Report of the 'ySocial Security Trustees, p. 58). 3. ' y Today's 30-year-old worker can expect a 27% benefit cut from the current 'y system when he or she reaches normal retirement age. (2004 Report of 'y the Social Security Trustees, p. 8) Without action, these benefit cuts will 'y only get worse. ' one can choose to accept or reject the proposed plans to fix the system. 'however, we need to acknowledge that we have a major problem on hand; and it 'y will turn into a horrible nightmare if not addressed properly and immediately. It is 'y very true that we inherited the problem and that it is not the result of our own 'y wrongdoing. However, you need to answer two very simple questions. Will the 'ySocial Security system be around when you retire and is it the legacy that you 'y want to leave behind for your children and grand children? Just to reiterate 'y President George W. Bush stance, the writer believes that "Social Security was a 'y great moral success of the twentieth century, and we must honor its great 'y purposes in this new century".

(State of the Union Address, 2005) The writer also 'y believes that as one of America's greatest and most important institutions, it 'y deserves all of our efforts to save it, for our sake and for the sake of America's 'y future generations. ' y

Bibliography

The Social Security Trustees Annual Report (2004), Retrieved April 12, 2005, 'y from web George W.
Bush (2005), State of the Union Address, Retrieved April 13, 2005, from 'y web.