The US Social Security Crisis - Essay Example

In the general sense, social insurance does more than can be evaluated in raising the families of the United States from the low class, passing them through the middle class to the higher class.

This is possible through the program the Federal Government has put in place to aid in the transfer of funds, within the economy among individuals in the quest to maintain an equal class of people, Hansen and Heckman (1996). This is particularly done under a standard measure, where every citizen is allowed to live above the poverty line. It should be pointed out that; social security program is the most effective plan which was put in place, as a check against poverty. It was a “poverty-reducing program” even for the non-elderly families, who receive survivors’ benefits, disability and unemployment befit.

But it is unquestionable that the elderly are the most beneficiaries in this case (Hansen and Heckman, 1996). Statistics show that social security pensions are the prime poverty cut for the elderly, which measured at 36% by the year 1958 to 14 % by the year 1983. The trend was downwards in the effectiveness of the social security plan. There are a number of causes for such loss of former efficiency. Currently, these causes are a crisis in the United States (Conesa and Garriga, 2008, p. 57).

The trend changed whereby this program was initially met to cater for the needy in the U.S. now cater for the employed and the middle-class individual. It is a paradox to the policy it supports. The whole system has been corrupted to the level where, even, the tax regimes have been reversed. Previously, a progressive tax system a braced, by supporting the social security system that inclusively leveraged loss of poverty in the U.S. A progressive tax system was in place that did support the fight against poverty (Hansen and Heckman, 1996).

Lastly, the former befits that were enjoyed by the elderly and the less privileged in the society were waived off, Hansen and Heckman (1996). This meant that a class of people slowly developed in the U.S. This led to inequality among the U.S. people in resource possession and purchasing power. The situation in the U.S. is a concept now known in the U.S. as “replacement income for prior earning”. This is particularly shocking as the statistical figures reveal that, the U.S. ranks 26th while Greek ranks 3rd in the support of “social security plan policy” (Conesa and Garriga, 2008, p. 59). The higher-level performance of the Greece economy in the support and performance of the social security plan than the U.S. is attributed to some facts, which are both internal and external.

Particularly, the European economy has helped Greece, to grow this much. Greece’s foreign policy focuses on the region and the growing volume of trade, and this case the European countries, Conesa and Garriga (2008). It has both direct benefits from this trade and all the spill-over befits associated. The European countries have highly demanded and invested in social security, which is favorable for investment (Hansen and Heckman, 1996).