Social Security Trust Fund - Essay Example

The fact of the matter is that Social Security has been viewed by both parties and many different congresses as a means to rapidly provide a level of funding to any number of pet projects or current goals that exist. Naturally, such a practice has been short-sighted, to say the least. The result has been that because such a high level of borrowing from the fund has taken place, no project or governmental action is necessarily better off. The level of intra-governmental debt has remained the same. Moreover, the worst part of this type of borrowing is the fact that how the laws that govern the use and utilization of Social Security “surplus” has meant that no meaningful level of surplus has been allowed to accrue. Concerning the way that Social Security surplus funds are allocated and distributed, the government considers a surplus as anything over current liabilities.

A secondary means by which the government could and should seek to provide extra resources to the Social Security Fund is to increase withholding taxes on paychecks. Although raising taxes is never a popular choice among candidates that are seeking popularity with their constituents, the fact of the matter is that it is mathematically proven that the fund itself cannot continue to survive unless it receives an influx of new cash; whether as a function of increased government debt or by increased tax burdens upon those individuals who will one day rely upon it. In this way, the reader can quickly see that there remain two options for keeping the current fund afloat past 2033; taxation or an increase in government debt. Because government debt already surpasses 15 trillion US dollars, the government shouldn't assume that it will continue to have the capacity or the option to borrow the funding necessary to provide Social Security past the time in which it will become insolvent.

As one is fully aware, the benefits of Social Security are not available to the individual until the age of 65. Although most individuals agree that this is not the case, the fact remains that the majority of those individuals that were expected to avail themselves of Social Security within the future, at the time it was founded, were not expected to live much longer than the year that it was made available to them.

The office of the chief actuary for Social Security provides 4 basic approaches for how this issue could be addressed. The first is of course to raise payroll taxes, the second to raise other taxes and earmark these for Social Security investment, the third to lower benefits, and the fourth and final to raise the retirement age. In terms of approach and actual feasibility, the federal government has indicated in the past that it is most amenable to raising taxes as opposed to raising the standards of eligibility for programs. As such, it is expected that they will likely go the route of raising payroll or other earmarked taxes rather than changing core components of eligibility.

Of course, the greatest difficulty with any of the issues that have been discussed is finding broad-based support among politicians that only seek to maximize their gain and do not have a thought for the best ways to ensure that the system continues to exist long after their term in office has expired. However, the fact of the matter is that there is no magic bullet and the only means by whereby the given system may be rescued is by implementing several of the difficult policy changes that this analysis has indicated. Read More