SOCIAL SECURITY: A CHANGE WOULD DO

YOU GOOD

Julie VoightEnglish 111 POF

Rachel Hartley-Smith

Current Social Security needs a drastic overhaul to maintain fairness and a return to its original intent

Driving Force Behind Social Security:

(The Great Depression)

o Life savings were lost by the 1929 stock market crash

o The Great Depression brought economic hardship, hunger and homelessness to millions of American families, especially the elderly

o The need to support the elderly was the driving force behind the development of Social Security in what would be dubbed The New Deal by Franklin Delano Roosevelt in 1935

"FDR signing Social Security Bill," in CU

Libraries Exhibitions , Item #346,

https://ldpd.lamp.columbia.edu/omeka/exhibits/sho/

perkins/social-security/item/346 (accessed July

29, 2010).

Social Security’s Original Intent

o Social Security system’s original intent- protect average citizen against a poverty-ridden old age

o Benefits set to begin at age 65 even though life expectancy was 61 years

o Social Security-designed to ONLY support those that outlived life expectancy and could TRULY be thought of as old

As cited by Caldera, 2010

o Can’t lose sight of original intent- keep elderly out of poverty, something it has done admirably

Social Security and Life Expectancy

o Life expectancy has increased dramatically since 1935

o Life expectancy is 76 years today, but benefits are set to start at 65 for most, and as early as 62 for a reduce benefit

o Full retirement age has not been significantly adjusted to reflect this suggesting changes should be made

(Congressional Budget Office [ CBO] , 2010, p. 15)

Pay-as-you-go plan

CURRENT SYSTEM: PROBLEM OCCURS:

o Social Security system is what you call a pay-as-you-go plan

o Payroll taxes are collected from current workers to pay Social Security benefits to retirees

o Less $$$ coming in each month than needed to pay benefits

o Congressional Budget Office noted Social Security outflows exceed inflows in 2010

Solvency???

CURRENT SYSTEM: PROBLEM:

o Current system is solvent; however the CBO (2010) says by 2040 the Social Security trust fund will be exhausted

o Surplus has been lent to US Government

o National debt $13 trillion and growing

Massive Debt Burden

Click icon to add picture

(Congressional Budget Office [ CBO] , 2010)

Young, 2010

Problems

o Life expectancy 15 years longer than in 1935

o Baby boomers born after WWII are starting to retire

o Fertility rates downo By 2020, only 2.1 workers paying into

system per beneficiaryo System needs a worker-to-beneficiary

ratio of 2.8 to function as pay-as-you-go (Young, 2010)

Changes To Be Made

o Can’t ask workers to pay into system that will ONLY pay 80% of promised benefits to support current retirees in pay-as-you go system

o Benefits need to be cut by 20% by 2040

Possible Solutions

Raise retirement age to 70

Shared reduction of benefits by current and future beneficiari

es

Conclusion

o For the past 75 years, the Social Security system has been successful in helping the aging population and lowering poverty level

o Possible solutions- raise retirement age and/or shared reduction in benefits

o Come together and make a change, not 30 years from now

Reference Pageo Caldera, S. (2010, April). Social security: who’s counting on it? Retrieved

from http://aarp.org/ ppi

o Congressional Budget Office. (2010, July). Social security policy options (pp. 1-67). Washington, DC: Government Printing Office. Retrieved from http://www.cbo.gov/ ftpdocs/ 115xx/ doc11580/ 07-01-SSOptions_forWeb.pdf

o Reyes, K. W. (2005, April/ May). Myths and truths about social security. Retrieved from http://www.aarpsegundajuventud.org/ english/ social/ 2005-AM/ 05AM_myths.html

o Social security (US). (2010, April 1). The New York Times. Retrieved from http://topics.nytimes.com/ top/ reference/ timestopics/ subjects/ s/ social_security_us/ index.htm

o Young, M. (2010). Smaller families and increasing longevity threaten social security. Opposing Viewpoints. Retrieved from http://find.galegroup.com.indianapolis.libproxy.ivytech.edu.allstate.libproxy.ivytech.edu/ ovrc/infomark.do?&contentSet=GSRC&type=retrieve&tabID=T010&prodId=OVRC&docId=EJ3010685208&source=gale&srcprod=SRCX&userGroupName=ivytech17&version=1.0