Macroeconomics of Social Security

Running Head : Effects of Social Security on the US Economy

Name

University

Course

Tutor

Date

Effects of Social Security on the US Economy

The debate on social security reform continues to increase in the United States and especially in the current election mood . Both sides of this much divisive economic and political debate continue to argue that their plan is most effective in saving the already deteriorating system . The economic profession that is supposed to provide guideline over the matter is also divided on the best route to

follow , which has eliminated any possibility of providing a unified approach to the problem . Unlike economists who approach the matter from professional point of view , many commentators happen to understand too little about the subject matter but express their views like professionals in social welfare economic Unfortunately , it is this group of commentators that have been educating the public about social security , albeit from partisan points of view The result has been continued public confusion over the matter , because individuals and entities that are supposed to improve understanding happen to be widening the misunderstanding gap in the society . It is in this understanding that concurrent sections of this would address the microeconomics of social security . The shall provide clears explanation of the matter without takings sides this approach would provide clears understanding of the matter in most clear manner

The United States Social security system refers to a combination of various welfare programs designed to help struggling individuals . Among the programs include : survivors old age insurance that provides assistance to retirees , disability insurance that aids people struggling with disabilities of different forms , and Medicare (hospital insurance that pays medical bills for the poor in society . All of these programs are financed through income taxes from workers in the American economy meaning that they are mandatory to pay . Though workers must pay their rightful share of welfare taxes , a good number of them also expect to be helped through the system in case they need such a help . As illustrated in the introduction , economists have pointed out several benefits and weaknesses of the system on the economy and individuals in general Among the benefits of the system is that people in the US are provided with a route of helping their unfortunate colleagues . The costs include being forced to contribute in the system despite having other means of achieving that goal indeed , individual payers have private ideas on ways of contributing to the needy privately without going through mandated routes . Despite these differentiated benefits and costs , the system works through the utilitarian approach of greatest good for the greatest number (McGovern , 2006 ,

. 54 . Benefits to the less fortunate people in society are therefore seen as greater compared with the costs faced by individual payers

Among the many costs of social security in the United States economy includes the payable amount compared to the contributed sum . In the early days of the system , the amount contributed to the system was way...