Pros And Cons Of Social Security

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<BR>The year is 1935, Franklin Delano Roosevelt is sitting down to add another item to the new deal to try to spark the recovering economy of United States. F.D.R is creating a way to spread the wealth of the nation over the entire population. He creates the Social Security program, which takes pay out of workers' checks and pays it out to the elderly to create a means of income after retirement. This is to be paid to citizens for the rest of their lives. The system works great in theory. This system, however, will fail if certain conditions exist. For the current system to function correctly everyone must live to roughly the same age; the average life span can not change rapidly, or sporadically over a large period of time. In…show more content…
One way that the problem could be temporally solved is by changing the qualifications the receive compensation. The Social Security system would have to be more selective and eliminate at least one third of the beneficiaries to be successful for any significant length of time. Specific qualifications such as maximum working income to receive retirement compensation, and age at which compensation begins would be most sensible to change. Other qualifications such as income levels in which the worker made a certain total amount of money or is the recipient of a very sizeable inheritance and would not require Social Security compensation to live comfortably in retirement. Other such circumstances would include one-time income sources such as lottery winnings and other…show more content…
The set up cost is huge and is variously estimated to be somewhere between four and eleven trillion dollars (Friedman). This cost merely needs to be understood, it is more of a financial transaction more than a cost because the money never leaves the Social Security system. This cost is an estimate of the money that workers keep in their private accounts as new retirees are receiving checks that have come from current workers in the past. With new workers saving all Social Security, money there is no money to pay current beneficiaries. This cost however is a one-time cost, and could be paid off in the first few decades of the system. The funds could pay interest because they would be very similar to government bonds. This form of collecting gross pay from workers could collect interest to be shared by the government and the workers to help cover the cost of privatizing Social Security. This cumulative interest gained by the government could be put towards paying off the initial debt of Social Security privatizing costs and eventually start to chip away and the national debt. This interest paying account would most likely provide a better interest rate than most standard bank savings accounts making Social Security an investment tool and asset to the American work

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