Social Security Essay

Submitted By msunderstood89
Words: 970
Pages: 4

As a result of changes to Social Security enacted in 1983, benefits are now projected to be allocated in full on a timely basis until 2037, when the trust fund reserves are projected to become drained (Annual Trustee Report, 2009). In order for Social Security to grow, and to endure in the long run, institutions must met fundamental human needs and must be aligned with fundamental human motivations. Institutions can be modified and changed, but it must emerge and conform to the experience of the human race (Ball,n.d. ). The popularity of the method has meant rapid growth. In 1950, before the first of the recent series of social security improvements, only about 25 percent of the people aged 65 and over were protected under social security and very few had any other kind of retirement coverage. Today, 85 percent are protected under social security, and, if you add the number protected under the civil-service retirement and railroad retirement systems, 90 percent of the present aged have pensions they can count on under programs of the Federal Government, based upon their work and contributions and paid without a test of need (Ibid, n.d.). The insurance program does much more, though, than reduce the need for assistance. Social insurance in this country has taken a form that has made it not just a program for low-income people but rather a universal retirement system supplemented with disability and survivorship protection and now health insurance for persons aged 65 or over.
The Social Security program was designed to stop poverty, and the system has similar objectives as any retirement system. And like any retirement system, it is meant to help people to live in retirement at levels above a minimum existence. The adequacy of Social Security benefits is the key element in determining how well people will be able to get along in retirement, and the same is true for widows and orphans and the disabled. Many people are on the benefit rolls for 15 or 20 years, or even longer, after entitlement. Both the civil-service retirement system and the military retirement system now include provisions to automatically adjust benefits to increases in the cost of living (Ball, n.d. ). Automatic adjustment of social security benefits to changes in price levels could be provided for without increases in the contribution rates that underlie the financing of the system. As wages rise, additional contribution income becomes available to the system and, because wage levels rise faster than price levels, the additional income would be more than sufficient to pay for adjustment of benefits to changes in price levels provided that, from time to time, the contribution and benefit base is increased as earnings levels rise (Ibid, n.d.).
Exhaustion of trust fund assets is projected to occur under the intermediate assumptions because program cost will begin to exceed the tax revenues dedicated to the trust funds in the future, requiring increasing amounts of net redemptions from the trust funds. The assumptions adopted for the 2009 Trustees Report resulted in projected "cash flow" shortfalls for the Old-Age, Survivors, and Disability Insurance (OASDI:OASI and DI combined) program as a whole starting in 2016, when tax revenue alone was first expected to be insufficient to cover the annual cost of the program. Historically, the OASI and DI Trust Funds have reached times where dedicated tax revenue fell short of the cost of providing benefits and also times where the trust funds have reached the brink of exhaustion of assets (Annual Trustees Report, 2009).
The Social Security trust is expected to be drained by 2033. Economists and the media have derived alternatives and changes to the system to prevent these harsh benefit deductions. Increasing Social Security taxes would help out the trust fund. Workers currently pay 6.2 percent of their earnings into the Social Security system up to $113,700 in 2013. If that tax rate was gradually increased to 7.2…