Throughout the past years, my parents have been telling me that the government will run out of social security money by the time I'm their age. I am currently working and I think it is a problem that I am paying for people's social security. At the age of 19, I will never see any of this money. My parent's generation is bankrupting this system. This means that I will have to retire later in life to be able to still have money coming in.
I believe that social securitys benefits out weight the negatives. It provides retirees with a comfortable living and it acts like an "investment", where one earns their savings after at least 10 years of work. However, the only problem is a decrease of funds that began as early as the 1970's due to an increase in life expectancy as well as the Baby Boomers generation. Many critics believe that the only way to solve this is to increase taxes, which I believe would be beneficial only if my generation will still see this money. It is unfair to still be paying for social security if I will never recieve it. According to the AJC, if taxes went up from 12.4 % to 14.3% social security would be able to cover its 75 year shortfall.
I strongly believe that people need to learn how to save their OWN money for retirement. Many people simply do not know how to save. I think that former Treasury Secretary Paul O'Neil came up with a fabulous plan of depositing $2,000 a year into a child's bank account until they reach 18 years old. At the age of 65 (a great retirement age), they would have $1,013,326, as well as gaining interest! On the plus side, this plan costs way less than social security. As long as this money is untouched until the age of 65, I believe that this plan would be beneficial.
Going back to the question, What do you think is being done about poverty?
In my inital response, I had never thought about social security. This plan helps retirees to not fall into poverty, which I believe is a great system we have established. The only problem is that there is a big cash deficit. This could be fixed by the % being taken out of your paycheck being placed into your bank account, rather than being placed into a big pot of government money.
Social security is a very complex issue and if it was up to me to find a solution I would not know what to do. However, for the purpose of this class I can point out few critiques with the plans you mention above. I think the least effective of the two is Paul O'Neil's plan of depositing 2,000 is unaccessible for the vast majority of citizens. In theory, it is the perfect plan, however,from the budget exercise and volunteering I have learned that many people make barely enough to live a decent life and too many people fall into poverty precisely because they can't make ends meet. Therefore, if they can't or can barely sustain their lifestyle then where will they get the money to save? On the other hand, raising the tax from 12.4% to 14.3% sounds like a good solution but how many people would be like "yay tax increase!". I will assume not many, and what happens after that 75 year shortfall? Will future generations be able to enjoy social security or would the government have to raise taxes again to meet another shortfall in the system? I think the proposed solutions are patches in the system, not a tangible solution.
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