Social
security is one of the successes gotten by the Americans. The program provides
a foundation of economics security for more than 47 million Americans and their
families. The reason for the built in protections, we have come close to
eliminating poverty among seniors. It also helps in the provision of basic
income to millions of families who have suffered the death or disability of a
wage earner.
The
financial security of social security is very strong. In 2003, it took in the
rate of $161 billion more than it paid out in benefits. These programs have the
resources to provide benefits for the baby boomers and their children and grandchildren.
The security trustees predict that it will pay ever -increasing benefits
through at least many more years to come when a surviving baby boomer will be
mostly in his/her 80s and 90s. If the US economy long-term growth rate falls to
half the level of the past 50 years, the trust fund may be depleted after 2042,
but social security payroll taxes alone would still cover benefits worth an
estimated $1000 more after inflation than today's senior receive.
Using less
-pessimistic assumptions, the trustees low - cost long term forecast predicts
that it will continue to provide each generation of retirees with more generous
benefits than their predecessors through the entire 21st century. If social
security finances are really in good shape why have so many politicians, policy
analysts,and reporters warned us that something must be done to save it? How we
have so many Americans become convinced that it won't be there for them.
Misconceptions
about social security are widespread because predictions about the distant
future based on multiples assumptions are reported as facts", frequently
distorted,and almost always considered out of context. In addition, some
organizations and individuals committed to privatizing it are driven by
ideology or hope of profiting from the billions of dollars in investments fees
that a privatized system could generate.
The
majority of American would be worse off financially under a privatized system,
all would be far less secure,and creating a new system would cost trillions of
new tax dollars. Therefore, undermining faith in the existing program has been
a major strategy private organizations have used to promote their agenda.
This
report provides background information on how social security works, explains
how it is that Americans can easily afford it in the long run even as our
population ages, and points out fundamental problems with proposals to
privatize the program.
Finally,
it recommends ways we should improve social security to serve Americans better.
While we most often see it as a retirement program, 30% of beneficiaries
collect survivors of disability insurance. Social security survivors insurance
provides benefits to the families of deceased workers, including children under
18, 18 and 19 years -olds in high school, disabled sons or daughters of any
age, elderly dependent parents, and surviving spouses who are elderly,
disabled, or caring for eligible children.
The social
security trust fund & the trustees report is based on the projects of
income and expenses of social security for 75 years into the future. The
projections require numerous assumptions about birth rates, immigration rates,
unemployment, average wages, life expectancy, and the like over. Over 75 years,
small differences in assumptions can result in large differences in outcomes.
The trustees make three different projections based on different assumptions.
These three scenarios are called the low cost, intermediate, and high -cost
projections:
The
trustees intermediate projection: the trustees intermediate projection predicts
that social security payroll taxes will continue to exceed benefits until 2018,
and the combination of taxes and interest on the trust fund will cover benefits
until 2028.
The
trustees low-cost projection with slightly different assumptions predicts that
the trust fund will never be exhausted and the program will always have the
resources to pay full benefits without any changes in the tax rate or benefit
formula.
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