Essay Social Security System: Success to Failure

On August 14, 1935 in Austin, Texas, President Franklin D. Roosevelt inked his signature on the Social Security Act. It was originally implemented to resolve problems with unemployment, old age insurance, and public health and welfare. The Great Depression was the catalyst for the creation of the Social Security program, and the basic structure was very similar to Germany’s social insurance programs from the 1880s. Today, social security is mostly used for retired senior citizens starting at the age of 62. At 62, American citizens can begin to collect, but will only receive 35% of their monthly benefit due, rather than the maximum amount of 50% when they reach the full retirement age of 66. (cite) In addition, social security is dispersed to about 14 million disabled people under the age of 62, who can no longer work in the labor force for various reasons. The people who qualify as disabled are just a small percentage of those collecting compared to senior citizens, and are often not mentioned when social security issues are brought up because of their minute effects on social security distribution.

Social Security has strayed from the first bill that was signed by President F. Roosevelt 80 years ago.

For years, Social Security has provided retired, disabled, as well many other Americans with financial security when they lacked or had little income later in their lives. Now, Social Security is being overwhelmed as the American population continues to grow. The Baby Boomers, or the demographic group born in the post- World War II era, from 1946-1964, have been the main reason for the prevalence of this issue. Millions were born during this era and by 2012 they were eligible for the full benefits of Social Security. Two years after that and for the first time ever, Social Security had to draw from its fund and since then they have not collected a surplus of taxes. Recent predictions show that by “2035, the number of Americans over age 65 will jump from today's 48 million to 79 million,” showing that this is just the start of Social Security’s problems to come. By 2035, I will hopefully be in my mid-30’s, wondering if one I would be able to afford retirement and without this system, I’m a bit unsure.

The social security act was created by President Franklin D. Roosevelt so that he could put in place provisions in order to help the elderly. The social security act a document that helps impoverished citizens, such as the elderly and physically impaired receive benefits after retirement. Citizens’ in America during the great depression where expected to work weather elderly or physically disabled. These citizens weren’t afforded the financial stability to retire so work was a necessity to acquire money. “Prior to social security, the elderly routinely faced the prospect of poverty upon retirement” (U.S SSA). This effect of the great depression led to a lot death and homes turning into singled parent homes with no income. “The widespread

     Social Security is a public program designed to provide income and services to individuals in the event of retirement, sickness, disability, death, or unemployment. In the United States, the word social security refers to the programs established in 1935 under the Social Security Act. Societies throughout history have devised ways to support people who cannot support themselves. In 1937 the government began issuing Social Security identification cards to all citizens. Each card had a unique number that the government used to keep track of a person’s earnings and the taxes collected from those earnings that went to finance Social Security benefits. The Social Security Act is an act in which

The United States’ Social Security system was implemented by Franklin D. Roosevelt on August 14, 1935 as a part of the New Deal during the Great Depression “to frame a law which gives some measure of protection to the average citizen and his family against the loss of a job and against poverty-ridden old age." Although the system has proven to be one of the most popular programs ever established, its future has been questionable for some time. According to the Social Security Administration (2008), “People are living longer, the first baby boomers are nearing retirement, and the birth rate is lower than in the past. The result is that the worker-to-beneficiary ratio has fallen from 16.5-to-1 in 1950 to 3.3-to-1 today. Within 40 years it will be 2-to-1. At this ratio there will not be enough workers to pay scheduled benefits at current tax rates” (Social Security Administration [SSA], 2008). This issue concerns many citizens, especially younger generations, and continues to be a hot topic of debate amongst politicians. Many ideas have been proposed about how to reform the current system. The most popular of these ideas is to create an entirely new system consisting of mandatory pension accounts which would allow individuals to accumulate a balance over time with investment options such as stocks, bonds, or mutual funds. This argument will show why Social Security should not be replaced by a mandatory private pension system.

Enacted in 1935, the Preamble of the Social Security Act stated that it was: An act to provide for the general welfare by establishing a system of Federal old-age benefits, and by enabling the several States to make more adequate provision for aged persons, blind persons, dependent and crippled children, maternal and child welfare, public health, and the administration of their unemployment compensation laws (Official Social Security Website, N.D.). These are the people who have the most difficulties supporting themselves, and if we are to be a “just society”, we should help those in need.

Social Security is one of the many government programs put into action by President Franklin D. Roosevelt because at the time the poverty rate among senior citizens exceeded 50%. The act was put in place to help people get past unforeseen or unprepared dangers in life such as old age, disability, poverty, and many other things. Basically if you fall into one of those categories you are eligible to get money from the government to help you get by. Money to fund the program is taken out of your check along with taxes, currently 6.2% of your check goes towards Social Security. The program needed to be set in place immediately so it does not work the same way a 401k or other retirement plans work. In a regular retirement plan money is saved individually

The championed cause of social responsibility is embodied in the Social Security program; at its core, Social Security's mission is to provide assistance to the elderly and less-privileged in society. Although it may have been a sound approach for its time – during the depths of the Great Depression, when many were poor and unemployed and the economy may truly have benefited from the increased spending – it has since become a bloated budgetary item. Many of its difficulties could be said to stem from its “pay-as-you-go” funding plan. Social Security withholdings are not put away for the future needs of the person from whom they are withheld, but are instead transferred to an existing claimant. The pay-as-you-go system means that current recipients are paid for out of current revenues.

Americans today must to plan for retirement that spreads beyond social security. Many reports have shown that social security funds will run out in the year 2036. Social Security may not even be obtainable to Americans in the near future for many reasons. For example, budget constraints, a bad economy, declining assets, stocks, 401Ks, IRA's, and inflation are big reasons why. For the past few decades, many Americans thought that they could rely on Social Security for their retirement plans. When the Great Depression happened, President Roosevelt saw a lot of Individuals not working and witnessed many of the nation's elderly with no money to retire. The Social Security program was to make sure this level of poverty cannot happen again for any worker who had paid into the program. Payroll taxes are what fund this program. After a certain percent of a worker's paycheck is taken out, it will go directly into the fund that that provides benefits to current recipients. When law makers first implemented the Social Security program in 1935, they set it up to have the working person pay into a fund to help the aging Americans that are too old to work. For many years, this philosophy has worked well.

Congress implemented the Social Security program in 1935 as a direct result of the poverty levels and soaring unemployment rates of the Great Depression. When it was implemented the system was set up as a prepayment plan. Congress tied distributions directly to the amount of money each individual paid into the system. This idea however did not work for long, so in 1939 Congress scrapped the prepayment concept and converted Social Security to a pay-as-you-go system that works only

　　Old age people were among the groups that had really benefited from the New Deal. The Social Security Act that FDR proposed was aimed to provide “economic security for individuals”[ Frances Perkins, “The social security Act,”in the The New Deal section, ed. Natalie Zemon Davis et al. Bedford/St.Martin’s Press 2000, 72.] and this particularly included old people. This Act was passed by Congress and signed by FDR in August 1935. Individuals who have worked before and met the government’s conditions were qualified to get old-age benefits. Although this act did not provide every single aged person with the old-age benefits, it at least ensured the benefits of those old people who have worked and had some contributions to the society. The monthly payments were sent to individuals from the age of sixty-five “in direct proportion to the total wages earned by such individuals in course of their employment ...”[] In other words, the higher the wage an individual had the higher

While the Social Security Act helped encourage a greater amount of care for underprivileged people, it simultaneously took a massive toll on the economy. In New Deal or Raw Deal?, author and economic historian Burton Folsom claims Roosevelt’s Social Security plan created many problems. Folsom points out that the Social Security Act retarded recovery from the Great Depression by contributing to unemployment as well as being financially unsound, as workers had to reach age sixty-two to receive benefits, while the average life expectancy at the time was only 60 years (Folsom 188). Employed workers were required to contribute a specific amount of money from their paycheck each month for thirty years while the average American never received any of the money that they had contributed returned to them. This system did not only discriminate against individuals that died before the age of 62, but since the average life

Following his election in 1933, Franklin Delano Roosevelt signed into law something radical for its time: The Social Security Act. This act changed America’s economic landscape completely, by minimizing the long-existing problem of retirees and the elderly living below the poverty line. Simply put, Social Security is a way to guarantee that older people, namely retirees, have at least a minimal source of income in their later years, by providing around 40 percent of the average person’s yearly income. Social Security both is and functions as a defined benefit plan, wherein benefits are decided by the amount of quarters than a person works, and are decided by a sliding scale with caps (United States). As directed by the sliding scale, per-dollar benefits are much higher for people of lower incomes, while overall-benefit amounts are higher for those of higher incomes (Benefit). Both the scale and the caps are adjusted yearly according to inflation. Social Security accumulates its funds into a trust fund, and puts excess money into investments in US Treasury Securities, where interest is accumulated and put back into the fund. Social Security’s benefits are not affected by the investments. Since 1982, the Social Security trust fund has experienced a net-increase and in 2015, the asset reserves sit at 2.8 trillion dollars (Financial). Despite this, the misinformed often point their fingers at the trust fund and claim that it is on its last leg, and will soon run out. Every few

Therefore, we accepted the fact that The Social Security gives us many privileges and helps the people in need. However, our country is trillion dollars in debt and as of now is still increasing. In the text it states, “The system adopted, except for the money necessary to initiate it, should be self-sustaining in the sense that funds for the payment of insurance benefits should not come from the proceeds of general taxation.”(Franklin D. Roosevelt “A Program for Social Security," Annals of American History.), this displays how much money we will have to pay which is also causing danger for our own country. Moreover we should using our knowledge to figure out a solution before it’s too late. In this it states, “.. it is necessarily out-of-date