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The Reliability of Social Security

The Reliability of Social Security

For several years now the general public and politicians have debated the long term solvency

of the Social Security system. While Americans continue to pay weekly, biweekly or monthly

into the program no one person seems to understand whether or not the Social Security

Department is stable enough nor is it even going to be around when they retire.

The purpose of this debate paper will be to provide you the reader with enough information

written from both sides of the argument and providing you with resources enough that you can

continue your own research in order to form your own opinion of whether Social Security is

Reliable or not.

The first order in this debate is to argue that Social Security is solvent and reliable. And how

do we know this? This is where understanding Social Security gets a bit tricky. One has to

understand that we have a group of “Social Security Trustees” who oversee the funds and report

out on the funds on annual bases. According to the Social Security web site and the Trustees

reports the” program and report on it financial conditions, program cost are expected to exceed

non-interest income form 2011 onward. However, due to interest (earned at 4.4% rate in 2011)

the program will run an overall surplus that adds to the fund through the end of 2021”.

What means to me is the system is a “pay-as-you-go system. As long as we have workers

working and paying into the system and the number of people drawing retirement do not exceed

the ability of the incoming social security payments the system remains solvent. However, there

remains a huge surplus of monies drawing interest overtime. As long as we can keep the

politicians greedy hands off the surplus monies the system will remain in place and stable for

many years to come.

President Jimmy Carter and the 95th Congress increased taxes to fund Social Security. While

this alone was not enough to sure up the system the Federal government appointed the National

Commission on Social Security Reform and appointed Alan Greenspan to look into the laws that

may need to be changed in order to sure up the program.

Greenspan develop a plan making the program solvent for the next 75 years with his forecast.

An then again this comes with risk, the risk of the politicians wanting to dip into the reserve (rob

from Peter to pay Paul). So far the Presidents have done a rather good job making this fund and

off limits fund. Until our current President Barack Obama, under his government they have

borrowed nearly $2.7 trillion as of 2011 from the fund for other purposes. While this did not

affect the expected date of exhaustion on the fund (2033) it did place a strain on how the

government is going to pay back the money.

While neither democrat nor republican it seems a bit strange to me that all other presidents

have managed to go around the Social Security Fund and manage to keep America alive so why

this one, why now, was there no other option? What would the interest rate be on $2.7 trillion

over 15 years? I hope they plan on paying that too.

Currently we as United States working citizens pay 6.2% of our weekly income into FICA.
The company matches that amount with another 6.2% totaling 12.4% of that amount 2.9% goes

toward Medicare. You know this if you have looked at your pay check lately. We currently pay

more FICA than we do Federal Income Tax.

Those who are among the wealthy will never receive Social Security in my opinion; they have

already performed a means test to make sure of that. And in fact I think the wealthy already

realize they will not qualify.

For many years the payroll taxes collected more than enough to cover the taxes until the soon

to come “Baby Boomers” which will put an over burden on the program creating a shortfall by

the year 2033 when the program is consider depleted. Of course our government has plans to

offset this potential shortfall with a number of spending cuts. First and fore most is the high cost

of government. While it creates jobs what are the pay backs? In other words what do we get for

our investment? In most cases, nothing, A lot of pencil pushing, paper crushing jobs that serve

no purpose other than giving someone a job.

In my opinion we will receive 25% less than those receiving Social Security currently, but

hey ten years from now or even in 2033 25% less will still be great. We work hard for the money

we receive. Our government is responsible and accountable for making sure our system is

solvent, reliable, and dependable. The investments they make with our money must be strong.

They should never ever touch the Federal Reserve monies put a side for Social Security.

In conclusion the Social Security Department is sound and solvent until the year 2033. We

need not worry for next 20 years. It is there after we need to plan for, it is the years after 2033 the

politicians are not planning for. The years where mine and yours alike, grandchildren will not

have Social Security to rely on. Should we worry? I say yes.

References:

http://www.ssa.gov/http://web.ebscohost.com.ezproxy.apollolibrary.com/ehost/results?sid=ba76

8fd2-d667-4a31-8095-

974d67f52d4e%40sessionmgr113&vid=2&hid=114&bquery=social+security+department&bdat

a=JmRiPTI3aCZkYj1hOWgmZGI9YXdoJmRiPWFobCZkYj1xYmgmZGI9YnRoJmRiPXJ6aC

ZkYj11ZmgmZGI9aWloJmRiPWkzaCZkYj1lb2gmZGI9ZWhoJmRiPTIwaCZkYj0yNmgmZGI

9OGdoJmRiPWhqaCZkYj0yMmgmZGI9bGtoJmRiPWY1aCZkYj1tbmgmZGI9bjJoJmRiPXRm

aCZkYj0yMWgmZGI9YndoJmRiPWU2aCZkYj1lMGgmZGI9c2loJmNsaTA9RlQmY2x2MD1

ZJnR5cGU9MCZzaXRlPWVob3N0LWxpdmU%3

Social Security Department, getrichslowly.org, face to face discussion with State Senator Bob

Coker.

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