Social Welfare Program - Essay Example

Social Welfare Program There are various social welfare programs in the United s. The programs are mainly beneficial to the elderly workers of the country. They include the social security, general welfare, medicare social welfare, education programs, food assistance and public housing social welfare programs (Landis 36). Social security is the most successful and prominent social welfare program in the United States. Its success mainly lies in the commitment to its goals and values. The program has several strengths that have played a large role in enabling it meet its goals, despite being termed unsustainable. However, establishment of Personal Retirement Accounts is a reform that could make the program sustainable in the future. The social security welfare program has several goals that it intends to meet. For instance, they aim at providing for the needy in the community. They are also determined in providing the economic security that the American people desperately need. Doing so would require them to maintain maximum freedom in the economic lives of the American people. Additionally, it aims at protecting the disabled and the elderly against expenses of illnesses that could otherwise drain their savings (Matthews 17). The provision of social insurance has been instrumental in the success of the program. Social insurance addresses the concept of economic security. The basic behide social insurance is that people make contributions to a centralized fund. The fund provides income to individuals who happen to find their income un-sustaining and give back after a period of time. Social insurance emphasizes on the social suitability of benefits. In its system, individuals who previously earned less income receive a higher benefit than those with higher earnings. It is this mechanism that has helped the system to grow in terms of benefits which is not applied by private insurance organizations. Social welfare has a number of aspects that contribute to its effectiveness. Provision of social insurance is one of those strengthening aspect to the program. Social insurance has been instrumental in empowering citizens. This is because it is a contribution made by people so that it can helps them get income later on. The concept provides a form of economic security to people. It enables them to provide for themselves even at old age when they cannot work (Matthews 17). Furthermore, the growth of social security in the country has been immense. Social welfare is the most successful social insurance welfare program in the nation’s history with great impact to many citizens. The amount of funds that get into the Social Security system each year is more than the gross domestic product of many nations globally. It has been the largest single function body in the budget of the federal government for a larger period of the last twenty five years. The program accounts for about five percent of the gross domestic product (Landis 42). Social Security has gradually reduced poverty levels among the elderly. When the program began, many old aged citizens could not sustain themselves. The levels of poverty among the elderly, in 1959, before any measures were developed were at thirty five per cent and above. However, by the twenty-first century, it had reduced to less than 10 percent. Today, about two thirds of the elderly rely on it for their income. The program has been a boost to the way of life for different people from all walks of life in the past 80 years. On the other hand, the system does have some few weaknesses observed in administration of its duties and are threat to its stability. The first weakness is the likelihood of massive future deficits. It is estimated that, by 2018, its retirement program will spend more funds annually in benefits than the total of funds it receives in taxes. When more funds are spend on benefits than those received from taxes, deficits are created. The deficits will in a few years’ time surpass $100 billion annually (Matthews 42). The system has a trust fund kit that operates under the government bonds through which people are encouraged to spend large amounts of their revenue to pay benefits. When they have to be repaid, the government is forced to increase taxes, increase government borrowing or reduce the expenditure on other government programs. Secondly, todays social security does not encourage workers to make savings. It takes a significant proportion of earnings that workers could save for future use. The lack of savings means that the system encourages dependency on the insurance. In addition, workers do not have property right to their benefits. Previous court cases have confirmed this case.The decisions made in both cases indicated that workers do not have rights to ownership of the program benefits (Matthews 67). Thirdly, workers will have a low rate of return on their income taxes. Low income workers and youngworkers will receive little in term of benefits for their income taxes. The young workers will pay more taxes than the older workers. Simply put, the benefits one receives will be less than what he will payin taxes. The situation is worse for the young workers who earn less income. A twenty-five year-old male, for instance, staying in a place in New York City that has low income receives a negative 4.46 percent return rate on his taxes (Morton III 65). Finally, the system is not as flexible as the modern flexible working system where individuals will only get a monthly payment when they retire. It ends when either their spouses die or when themselves die. The approach hurts those who die between 50 and 70 years. A flexible system should give them an option whereby a portion of their taxes goes to their families. Social Security has been instrumental in protecting many workers from poverty when they are of age. However, population characteristics are changing. Therefore, Social Security also needs to change to sustain demands of the population. The reform could further improve the social security welfare program is the concept of personal retirement accounts. It involves citizens saving some of their taxes in personal retirement accounts. Establishment of accounts is not a new idea having been adopted by President George Bush. They strengthen Social Security by helping citizens to increase their retirement income. In addition, the citizens are enabled to build for their families a better economic future (Morton III 68). In finance, the costs of doing nothing are usually higher while transition costs, on the other hand, are only higher in the short term. Transition costs in this case would involve opening personal accounts. It would be expensive but the benefits of opening personal accounts outweigh any disadvantages involved. It is, however, more economical than the long term impacts that the current social security system would pose on Americans (Morton III 98). The hortatory technique would be more effective in implementing the establishment of the Personal Retirement Accounts. The technique involves encouraging citizens to be open to the idea of opening Personal Retirement Accounts. A voluntary Personal Retirement Accounts system would encourage many investors. More investments contribute to the success and sustainability of the program. The future prospects expected with the social welfare program involves disabled, the elderly and the most vulnerable people in the American society. It is becoming unsustainable in the long term. It has no chance of remaining financially sustainable in coming years. The trend should be reversed to ensure the program continues providing the benefits to the people (Morton III, 102). In conclusion, social security is the largest source of income for most American retired workers. It is, however, not fair to force the senior citizens into poverty through low Social Security benefits. In addition, the idea of them paying for unrealistic promises is unfair. The establishment of the Social Security Personal Retirement Accounts is the best way to avoid both these extremes. Personal Retirement accounts will preserve retirement benefits and reduce unfunded promises that have to be paid by future generations. However, they must be carefully implemented to work properly. Citations Landis, Andy. Social Security: The Inside Story. North Charleston: CreateSpace, 2012. Print. Matthews, Joseph. Social Security, Medicare and Government Pensions: Get the Most Out of Your Retirement and Medical Benefits. California: Nolo, 2014. Print Morton III, David. Nolos Guide to Social Security Disability: Getting and Keeping Your Benefits.California: Nolo, 2014. Print. Read More