Social Security is one of America's most important and successful programs. It has, since 1935, helped to reduce the poverty rate of those 65 and older drastically, having a greater impact than any other anti-poverty measure. Increasing Social Security expenditures since 1960 have reduced it further, from 35 to 10 percent of those over 65. Social Security has helped to bring about a situation where the number of elderly living below the poverty line is roughly equal to those of working age adults. The impact and influence of Social Security on America's workers means that its predicted shortfall must be treated with some concern and the government should begin taking steps to ensure the program's solvency sooner rather than later. However, claims that Social Security will go broke soon, are unnecessarily alarmist. It is predicted that the system will be pay out a majority of benefits for the next 38 to 48 years, if no steps are taken now. This gives the government enough time to weigh its options in keeping the system solvent. Yet delaying the implementation of these changes reduces the ability to spread costs more evenly over the working population and places a greater and unfair burden on younger workers.
[...] Social Security can only find permanent solvency in either reducing current benefits or increasing payroll taxes, or a combination of the two. Certainly, other reforms are desired and encouraging people to retire later and boosting income through economic growth should be considered as well, but these are not the overall solution for solving the shortfall. There are numerous risks associated with privatization and fewer benefits than what be gained through a simple change in payments and taxes collected out of payrolls. [...]
[...] Dean Baker and Debayani Kar of CEPR, Defined Contributions from Workers, Guaranteed Benefits for Bankers: The World Bank's Approach to Social Security Reform, July 2002 Paul Krugman, Little Black Lies in The New York Times, January Social Security Reform: The Nature of the Problem. Issue Brief No US Department of the Treasury "Our Fight: Keeping Social Security Strong." AARP Nov
[...] One of the arguments for private accounts is that it will save money in the long run, or at least will be cheaper than spending money to help balance the payments of the Social Security Administration. They claim that the cost to fix Social Security will be too great for the American economy and the American taxpayer to bear. While the shortfall predicted to begin and 2017, and growing is large, compared to other recent federal expenditures and tax cuts, it is smaller. [...]
[...] African American women live as long as White males, and once they are 65, African American men live long enough to collect their share of benefits, their lower life expectancy due more to a higher death rate among the youth and infant mortality. This argument assumes inequalities in education, employment, and health care will remain in the future (while doing nothing to address or solve them), and ignores that African Americans are more likely to be a recipient of Social Security for disability and because of the death of a family member. The experiences of other countries with privatization should also be taken into account before considering a switch to private accounts. [...]
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