FICA/301: Is Social Security System Broken?
Is Social Security System broken?
Social Security
EC 301
What exactly is Social Security? Social Security was a program that was created by the federal government that was supported by nearly every working person in America. The Social Security Act was signed in 1935 by President Franklin D. Roosevelt, which was to provide retirement, survivors, and disability benefits to workers and their families, and to assume some of the health care costs borne by the elderly and the long term disabled. According to Epstein (2010), “President Roosevelt wanted to be sure that this country would never again face a crisis so disastrous to so many lives” (p. 4). Social Security is made up of the following programs, …show more content…
The Social Security was not immune from any of these financial crisis. To try and remedy the situation the Social Security Administration created FICA and COLA. However, the program continued to operate at a deficit. In 1983 an amendment was passed to the Social Security Act that would raise taxes and cut benefits. With the new changes the Social Security began running in a surplus. The surplus though, wasn’t permanent, there was speculation that by 2037 the Social Security may face another financial crisis. There are more people claiming Social Security benefits, however the rate of unemployment is rising, therefore there was money going out but not as much money coming in. Social Security has been running a surplus, more supply than in demand, since 1984. The surplus of funds were being invested for future needs and were earning interest. The changes brought about from the 1983 Amendment such as raising the taxes from 5.4 percent to 6.2 percent, lowering computations, raising the retirement age and stiffening eligibility requirements have contributed to the surplus. “The accumulated surplus funds, about $2.5 trillion in 2010 and growing are invested in U.S. Treasury bonds, widely considered the safest investment in the world,” according to Landis (2011, p …show more content…
The Social Security has managed to maintain a surplus since 1983 and will continue to do so until about 2037, if action isn’t taken to raise taxes or increase the contributions. President Barack Obama has a unique idea of imposing higher payroll taxes on wealthier individuals. Individuals may be under the impression that the Social Security may be broken because the amount of benefits they receive is minimal and expect those benefits to be their sole income. Individuals must come to the realization that Social Security is only there to supplement their income and not be their only means of an
Social Security
EC 301
What exactly is Social Security? Social Security was a program that was created by the federal government that was supported by nearly every working person in America. The Social Security Act was signed in 1935 by President Franklin D. Roosevelt, which was to provide retirement, survivors, and disability benefits to workers and their families, and to assume some of the health care costs borne by the elderly and the long term disabled. According to Epstein (2010), “President Roosevelt wanted to be sure that this country would never again face a crisis so disastrous to so many lives” (p. 4). Social Security is made up of the following programs, …show more content…
The Social Security was not immune from any of these financial crisis. To try and remedy the situation the Social Security Administration created FICA and COLA. However, the program continued to operate at a deficit. In 1983 an amendment was passed to the Social Security Act that would raise taxes and cut benefits. With the new changes the Social Security began running in a surplus. The surplus though, wasn’t permanent, there was speculation that by 2037 the Social Security may face another financial crisis. There are more people claiming Social Security benefits, however the rate of unemployment is rising, therefore there was money going out but not as much money coming in. Social Security has been running a surplus, more supply than in demand, since 1984. The surplus of funds were being invested for future needs and were earning interest. The changes brought about from the 1983 Amendment such as raising the taxes from 5.4 percent to 6.2 percent, lowering computations, raising the retirement age and stiffening eligibility requirements have contributed to the surplus. “The accumulated surplus funds, about $2.5 trillion in 2010 and growing are invested in U.S. Treasury bonds, widely considered the safest investment in the world,” according to Landis (2011, p …show more content…
The Social Security has managed to maintain a surplus since 1983 and will continue to do so until about 2037, if action isn’t taken to raise taxes or increase the contributions. President Barack Obama has a unique idea of imposing higher payroll taxes on wealthier individuals. Individuals may be under the impression that the Social Security may be broken because the amount of benefits they receive is minimal and expect those benefits to be their sole income. Individuals must come to the realization that Social Security is only there to supplement their income and not be their only means of an