Social Security

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Social Security : Definition , Function and History

Introduction

Social Security is America 's largest and most popular government program . But it is also a deeply troubled one . In just 15 years , Social Security will begin to run a deficit , spending more on benefits than it takes in through taxes . Overall , the program faces nearly 26 trillion in unfunded liabilities . Without massive tax increases or benefit cuts it quite simply cannot pay the benefits that it has promised . At the same time

, payroll taxes are already so high that younger workers face a declining and below-market return on the taxes they pay . This crisis has prompted the most far-reaching discussion of the purpose and structure of Social Security since the program was enacted in 1935 . Not so very long ago , Social Security was rightly regarded as the third rail ' of American politics - touch it and your career dies . Polls today show that the vast majority of Americans support proposals that would allow younger workers to privately invest at least part of their Social Security taxes through individual accounts (Tanner 2004 5

During the overall course of the study , the primary goal is to identify Social Security in its very essence as well as its functions Furthermore , the study includes historical accounts in to provide the answer to the inquiry of Social Security evolution and the current estate that it is experiencing . Mainly , the study provides awareness expansion on the primary subject , Social Security System

Discussion

What is Social Security

Social security is the general term that describes a number of related programs - retirement , disability , dependents , and survivors benefits These programs operate together to provide workers and their families with some monthly income when their normal flow of income shrinks because of the retirement , disability , or death of the person who earned that income (Matthews and Berman 2004 11 . Unfortunately , this goal of providing financial security is today increasingly remote . The combination of rapidly rising living costs , stagnation of benefit amounts , and penalties for older people who continue to work had made the amount of support offered by Social Security less adequate with each passing year . This shrinking of the Social Security safety net makes it that much more important that they get the maximum benefits to which they are entitled (Matthews and Berman 2004 11 . One of our nation 's most challenging public policy debates concerns Social Security reform The program is in crisis and in need of reform as a result of maturation of the current pay-as-you-go (PAYGO ) Social Security system coupled with an aging American population . People who have participated in Social Security since its inception have received much higher average annual real rates of return on their contributions than have later participants . This is due , in part , to the basic design of the PAYGO program under which earlier participants received windfall gains as the necessary result of moving from the start-up phase to a mature phase while later participants receive...