Social Security Insolvency

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Social Security Insolvency Mohammad Rahman Brief history of social security Social security of America refers to the economic benefits which are provided to the people by the United States of America. It is their duty to make sure that economic welfare has been achieved. Center link is the body of the government who makes sure that economic welfare is achieved and it is the body which makes all the necessary payments to the poor people for their security. It provides services like income support, age pension, new start allowance, youth allowance, sickness allowance, parental allowance, career payment, and other additional and supplementary payments. Earlier, in the 19th century, the poor and the illiterate people of…show more content…
It is a blessing to all those poor and illiterate people. The pension policies generated by the officials of the system benefits the citizen of their respective country. As it has certain benefits, it also has some disadvantages as well. Due to these disadvantages, the commission is bringing out some proposals, in order to raise the social security retirement age and cutting the benefits as well. The basic disadvantage of the social security system is that, that it is making people lazier in their respective form of work. People are more interested in the amount of pension they will be paid, rather than working and checking their own efficiency to work. Though, this program has been designed in such a way that, the amount of pension a person will get, depends upon their premiums paid to the trust. But, still the people are getting more of lazy at work. It is because of this cause, that the people are anticipating insolvency of the social security system. As people are getting more interested in these pensions and these policies, generated by the social security system, the output of each labor is not at all increasing. It is constant. This is because, they know, at the end of the day, they will be provided with proper funds and pensions. And hence, these employees are less interested increasing their own productivity. This is why we say, that this is one of the most major cause of the…show more content…
An opinion as to what action the government should take to rescue the funds. It has become necessary for the government to take proper decisions or actions to rescue the funds of the social security system. If they do not take or adopt proper actions for it, it can lead to insolvency of the whole system. If the government starts investing all its funds in the private sectors of its own country, this will create excessive amount of investment and bubbles in the society. Due to this, the investment made can create principles losses during downturns and in the cycle of the business. It would definitely create a lot of panic in the people, regarding their own pensions, during the time of recession. Therefore, it would be more appropriate for the government to adopt “pay as you go” system, which really means that its premiums are invested in the treasuries of the US or any other country. As the federal government can increase the amount tax collected, can take loan, or can even print money (if required), the “pay as you go” system is the best and appropriate alternative. By adopting this method of funding its premiums, the government can make sure, that all the policies generated by them are being fulfilled. This method is widespread method of funding and governments of many other countries have started following this method of funding. It is regarded the most appropriate method of funding. Nowadays, as we all know, the social security system of any
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