Social Security System - Essay Example

Download file to see previous pages But there is more to the Social Security System than a mere pension arrangement. The economic gait is that Social Security is a mechanism whose functioning ensures the provision of revenue for disfavored members of the society such as the old, the handicapped, the ill and the unemployed, so as to enable them meet up with basic necessities. Like the Balance of Payment (BOP) and the business cycle, the Social Security System experiences many set backs but there exists a Social Security problem. The interest here is to identify this problem and propose a way of fixing it. It shall therefore be important to view the functioning of the Social Security System then identify the Social Security problem before proposing a possible solution to this problem.
In an article entitled 'Solving the Social Security Problem in America', published in his website; Russell Bailyn's Financial Planning Blog, the New York Wealth Manager, states that: 'Social Security is a federal program which provides retirement and disability income to workers through the collection of Social Security taxes. Every worker in the United States is responsible for paying these taxes during their working years and entitled to receiving benefit checks when they are eligible for retirement.' Bailyn's explanation is a perfect illustration of
how the Social Security System functions. ...
Bailyn further explains that the people who are most concerned with the system are often unaware of it. 'I'm unaware that 12.4% of my paycheck goes towards these taxes, I'm just too far from receiving benefits to worry about it. Perhaps part of that irresponsible logic stems from how the system is organized. Rather than each taxpayer's Social Securitydollars getting earmarked for their own retirement, they get paid into a common pool of money allocated by the federal government. (Bailyn, Russell. 'Solving the Social Security Problem in America').
The Social Security is an 'unjust' system as it the origin of a major problem. The problem of the Social Security lies in its impracticable nature and its tendency towards monetary difficulty. In effect, the problem lies in the fact that for any given economy, if there exists a rapidly increasing ageing population and a small working population, then the amount of money placed in the Social Security fund will not be enough to salvage the problems of both the present and future ageing populations as well as other disfavored sections of the population. In the same line, the system is not a viable one since those who are currently paying their money into the system may later not benefit from it. This is explained by the simple fact that the Social Security system is not like a private bank account where one places his income and later on retrieves it at will. On the contrary, the money one pays into the Social Security is used for the needs of others and if later on the payee is unable to also benefit from the system due to a lack of funds then the system is clearly an unworkable one. 'Perhaps part of that irresponsible logic stems from how the system is ...Download file to see next pagesRead More