There are many proposed ways to deal with the problem of funding social security in our country's future. The problem, though, is not with funding social security as much as it is with the consequences of funding social security and what those consequences will mean for us when we reach the retirement age. Playing the social security game demonstrated some proposed solutions to help fund social security, and the consequences that went along with allotting that funding. There are three basic ways to fix the social security problem: reduce benefits, increase revenue, or investing money in the private sector. Benefit reduction requires cutting out some current funding in the future to save on total costs.
An example of this would be when a customer is not able to pay their bill because due to a downturn in the economy, money may be tight if they have been laid off from their jobs or faced with unexpected hospital bills. Under the direct write-off method, companies record bad debts expense in a period that is different from the period in which they record the revenue. The method does not attempt to match bad debts expense to sales revenues in the income statement. The direct write-off method show accounts receivable in the balance sheet at the amount the company actually expects to receive. Unfortunately, unless bad debt losses are insignificant to the company, the direct write-off method is not acceptable for financial reporting
These clients were rarely worried about tax implications because they were mostly not-for-profit or were granted tax-exempt status for managing retirement plans. In 1989, DFA decided to pursue high-net-worth individuals, in addition to institutions, as clients. However, because of the illiquid nature of many DFA holdings, DFA realized that direct accounts with individual investors would likely lead to intolerably high costs. Therefore, DFA offered investment services to individuals through a limited number of investment and accounting firms that acted as intermediaries known as registered investment advisors (RIAs). These RIAs helped DFA offer its high net worth investors the same low cost small and microcap investment vehicles, while making these investments relatively more liquid in the secondary market.
The corporate tax reform proposed in this budget would eliminate loopholes. Other benefits include the reorganization of government processes to better serve economic goals and education reforms providing grants and job training. Some criticisms of the Democratic budget proposal are that the cuts are too “safe,” (CNN 2011) debt loads estimated growth under the Democratic budget is still viewed as too large. There is no mention of attempting to change policies on mandatory spending in order to decrease the funding to these programs. The proposed burden of Democratic programs is estimated to double the burden if the proposals for discretionary spending remain at such a low rate (CNN
In 2000 revenues exceeded expenditures, however the government chose to lower taxes and increase spending; opposite of economic theory. This paid off following the 911 attacks making the anticipated recession the shortest to date. The United States deficits are funded by the selling of bonds. If buyers are unwilling to buy these bonds, the central banks buy them. Because these loans are IOUs, they can be offset by printing more money.
When an individual passes away and before his or her heirs receive any money all debts must be paid, unlike the government (Colander, 2010). Another difference between government and individual debt is that the government can create money to pay off debts if needed whereas an individual cannot. This week’s objectives gave us, a better understanding of how deficits and surpluses work also how deficits are not always bad. It also taught us how difficult it can be for the government to pay off debts and to come up with a budget that will lead us out of a
Taxpayers have the incentive to try to pay as little tax as possible in order to maximize their wealth. The IRS may choose to negate certain matters under the Sham Transaction Doctrine. Corporate taxation law is constantly growing and adapting which make the validity of these transactions even less clear.
America is currently in a recession and times are rough. Her motivation came from the opportunity to financially help friends and family. It seemed like a few harmless clicks of a mouse. The article does not reveal how Griffin rationalized her actions. More than likely she felt that her friends and family were entitled to money from the government.
“Back when there was twelve people paying in to support one it was fine, but now when you have three people paying in to support one, what do you do; raise taxes or cut benefits? (Lowery, Jarrod)” The two answers to fix Social Security will hurt some people. For example, if taxes was raised my generation would probably never see the benefits of Social Security because they would be cut out due to the tax prices being raised. If benefits were lowered then that would affect the older generation, because they would not be able to pay for the bills they may receive when Social Security is the only income that they receive in their household. Studies show that people eighty and older Social Security provides seventy percent of their income.
A goal of Social Security is to take care of the elderly. There is a misconception that Baby Boomer would place great stress on Social Security. However, Baker says, “the demographics of the Baby Boom have very little to do with the long-range problems