Social Security

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Social security in the United States is attained at the age of 62 where beneficiaries fully get the benefits of saving. This pay as you go program that is beneficial upon retirees, disabled persons and deceased workers. Social security is regarded as job saving techniques for long term investments for the future of the family. In the USA alone almost 48 million are provided income by social security, however there is an alarming rate of retirees living longer and increasing in number (Baker & Weisbrot, 2001). The Congressional budget has estimated growth of the trust fund but the question to be asked is how they can address the funding short fall. There are various ways which could be used such as increasing taxes, reduce retirees benefit or increase the age for eligible social security benefits. The social security trust fund and congress can address the issue changing benefits in the future. Congress will benefit since social security payments were tax free since 1978 to 1984 where the first tax on social security was imposed. Workers were paid through payroll deductions and received benefits tax free after they retired.

Tax is a means of government revenue and to maintain balance between high income earners and low income earners we have to establish equilibrium. This distribution of wealth would eventually follow the Omnibus Budget Reconciliation Act which increased the percentage of benefits. The higher income earners should be taxed higher than lower income earners on their benefits. This would increase the Social security fund by 3% which would help reduce the deficit and money accumulated could be availed to today’s workers. Cutting benefits by rising age for social security benefits is not a solution because deficit will still be carried forward and benefits are reduced by 7% each year .Congress can invest more apart from Treasury bonds they can seek alternative investment options that would sustain their growth. It is estimated that from the current budget there will be 100% growth by 2033, congress does not understand cost of living increases annually and laws can be amended to increase tax causing same crisis (Goss, 2010).

Supply side economic increase the supply of goods and services and it implies that if corporate taxes are decreased money will be spent on research and development. The only deficit is long-term deficit since the more the goods and services the more consumers are willing to spend and want. Thus demand side economics is better in that it is all about increasing demand to consumers through discretionary funds to drive consumers spending. Demand can be increased either by increasing minimum wage or creating jobs. Wealth distribution should be implemented, through increasing taxes to corporate and redistributing the wealth to poor and middle class.

Reference

Baker& Weisbrot, D. (2001). Social security: The phony crisis black literature and culture series. (Vol. 1, pp 3-20) Chicago: University of Chicago Press.

Goss, S. C. (2010). The future financial status of the social security program Social Security Bulletin, 70(3),