The State of Social Security in the United States - Term Paper Example

Social security programs and policies in the United s have become one of the most critical issues of the time. It broadly refers to the government benefits to the old age, survivors, disability sector, unemployment sector, needy families etc. (Brown, 1972). In the recent times, the programs have been faced with huge challenges from various socio-political and economic fronts. The states are undergoing dynamic changes due to rapid globalization. It has brought great influx of people from diverse region, color and race that have significantly impacted the social policies of the state, especially under the existing norms. The increasing numbers of baby boomers and the recessive trends in the economy have been the major concern of the young people who are the main contributors to the social security funds of the state. The role of the state therefore, has become crucial, while incorporating the new developments in the societal changes of the time in their social policy so that state benefit can reach every one. Social security is primarily insurance programs for the old age, survivors and widows of earning members, disability sector, unemployed and the people who need state benefits to survive with dignity. Popularly known as OASDI or Old- Age, Survivors and Disability Insurance, its major funding for the same comes from taxpayers who have to pay contribution under Federal Insurance Contribution Act or FICA. The tax deposits is transferred to trust funds dedicated under different programs like old age and survivors insurance fund, federal disability insurance trust fund etc. When the revenues exceed expenditure, the excess fund is invested in government ‘bonds’ that is non marketable and is often used by government as deficit spending. In recent times, it has come under huge controversy mainly due to myriad reasons like increasing number of baby boomers who have retired, the rising numbers of unemployed who are unable to contribute etc. and therefore the burden of contribution to social security fund has increasingly been borne by the current contributors. They feel that the fund might not be able to sustain their old age needs. The changing demographic equation and the old has necessitated reforms within the social security programs of United States so that new mechanisms can provide equity in state benefits to the various segment of concerned population. The following recommendations are designed to evolve innovative input into the state policy matter vis-à-vis social security. It is envisaged that new mechanisms would facilitate for effective and long term sustainable social security programs. 1. Introduce tax benefits and retirement age Coile and Grubber (2000) believe that retirement age should be redefined in terms of years that could maximize social security wealth. Indeed, the retirement age needs to become the personal choice of the working population so that they are able to significantly increase their post retirement benefits. It is found that the tax benefits vis-à-vis age becomes a major incentive for the working population, especially for higher age group who increasingly pay lower taxes. Hence, innovative tax schemes should be introduced so that younger people would be attracted to contribute more towards social security fund. The baby boomers have become major beneficiaries of social security funds. The increasing number of baby boomers has significantly impacted the labor market and reduced productivity vis-à-vis accrued income to expenditure. The baby boomers and retirees who are in good health must be encouraged to become productive through self employment. This would help lessen the burden on the young working population. Social security number should become mandatory for all citizens so that social security umbrella could be extended to the legitimate citizens of America. It is also recommended that the immigrant population should be required to pay extra for their spouse and children until the time they become eligible for permanent citizenship. 2. Investment of SS fund for higher returns A part of trust fund for each category must be judiciously invested in the market for higher returns so as to increase the cash flow and help meet the contingencies such as recession and inflation. Emery and Rongve (1999) assert that ever generation is richer or wealthier than its predecessor. Thus it is assumed that even if the current generation contributes more towards social security in an environment of economic growth, it would still be left with enough income to enjoy its current lifestyle. But at the same time, the recessive trends in the economy necessitate judicious investment of funds for contingencies. The government bonds, hitherto used for investment do not generate income that can be used in future. Thus, significant part of social security fund must be invested in the market for higher growth and return. The gender based discrimination in the social security needs to be abolished for the wider welfare of society. The women should become equal contributor to the social security programs. 3. Public private partnership in healthcare delivery The major expenditure of social security fund goes into the healthcare delivery. Hence, the government needs to forge partnership with private healthcare providers who would be able to provide state of the art healthcare. The private equity must be encouraged in non core activities of healthcare like infrastructure, portering, laundry, contract labor etc so that public healthcare system is able to focus on efficient delivery of healthcare. The outsourcing of some of the administrative services to private sector would go a long way in improving the quality and effectiveness of public healthcare delivery. It should be made mandatory for the private hospitals and healthcare providers to facilitate services to the under-privileged and ensure equitable distribution of efficient healthcare delivery to the people who might e at higher risk. The government needs to introduce mechanisms that would facilitate private institutions with subsidies in the core activities and tax rebate to make it more attractive. Hughes (1999, p58) says that any increase in national savings may be balanced by a drop in government tax revenues. Thus, tax incentives would be able to improve the overall national savings vis-à-vis tax revenues. 4. Promote holistic approach to healthcare Most of the social security fund is used for healthcare at later stage of life by the people. Hence, it is assumed that the consumption of fund would be drastically reduced if the people are able to maintain better health. Another important fact is that inflationary trend in the economy and the rigidity in the health insurance are creating an extremely vulnerable segment of society who needs to be addressed urgently both in terms of micro level and at macro level. Thus, people should be encouraged towards a holistic approach to healthcare through the use of alternative medicine. Health is defined as ‘a state of complete physical, mental and social well-being and not merely the absence of disease or infirmity’ (WHO, 1998). The alternative health medicines integrate physical, mental and social well-being of the people. This approach ensures that the preventive actions and awareness greatly facilitates the overall well-being of persons. Adopting holistic approach through the use of alternative medicines hugely promotes all round welfare of the person because it is based on the principle that the person needs to ‘feel’ good to become healthy. Ernst et al. (2004) have defined alternative medicine as diagnosis, treatment and/or prevention of diseases which complements mainstream medicine and meets the demand by diversifying the conceptual frameworks of medicine. Indeed, the effectiveness of the healing is strictly holistic and often treats the disease, not as an isolated event but as part of the wider perspectives that takes into account the physical, mental and social aspect of the individuals. By adopting this model of preventive healthcare, the government would be able to increase the reserve for longer period of time. (words: 1278) Reference Brown, J. D. (1972). An American Philosophy of Social Security. Princeton, NJ: Princeton University Press. Coile, Courtney and Gruber, Jonathan. (2001). ‘Social Security Incentives for Retirement’ in Themes in the Economics of Aging, David Wise, ed. Chicago: University of Chicago Press. Emery, J. C. H., and I. Rongve (January, 1999). Much Ado About Nothing? Demographic Bulges, the Productivity Puzzle and CPP Reform. Contemporary Economic Polic; 171(1):68–78. Ernst E., Cohen, M H., and Stone, J. (2004). Ethical problems arising in evidence based complementary and alternative medicine. J Med Ethics; 30:156–159. Hughes, G. (1999). The Cost and Distribution of Tax Expenditures in Occupational Pensions in Ireland. Seminar paper, The Economic and Social Research Institute. Dublin, November 11. World Health Organization. (1998). List of Basic Terms: Health Promotion Glossary. (pp. 4). Retrieved from: Read More