" The Bush "plan," such as it is laid out online, boils down to a succinct five bullet points: a) "personal accounts" would be voluntary; b) your social security money would be invested in a "conservative mix of bond and stock funds" which, the White House asserts, "would have the opportunity to earn a higher rate of return that what is being provided now; c) a young person who earns about $35,000 annually would realize "a quarter million dollars" of savings in his or her "own account upon retirement"; d) that little nest egg would supplement the worker's "traditional social security check"; e) the "empty promises" of the present system would be replaced by that quarter of a million dollars. Beyond the justifications offered earlier in this paper, why is President George Bush pushing hard for his plan to have social security recipients divert their federal retirement money to private accounts; what are others saying about the Bush Social Security plan? According to an article by the Washington Bureau Chief of the Sunday Denver Post (Farrell, 2005), John Aloysius Farrell, on March 13, Bush has only "described how a system of personal retirement accounts might operate," but, the Post continues, Bush "has not offered a way to make the system sound
The commercial also says that "if nothing is done," Social Security will "go bankrupt." Progress for America" spent millions of dollars promoting Bush's reelection campaign, according to an article in the New York Times (Justice, 2005)
The current commercial, which opens "with a scene of a fog-shrouded iceberg," will run on "national cable channels for weeks," the Times' piece stated. The Democrats have countered with ads of their own, according to the Associated Press (Raum, 2005) on Sunday, March 13
. [and] looks like a slippery first step toward eliminating the cap altogether, as happened with Medicare" (Reynolds, 2005)
Social Security has been viewed by reform advocates as an anachronism erected on melancholy era apprehensions on the subject of high joblessness as well as prevalent enslavement among the aged. They have viewed the outlook of reform presently as an opening to bring up-to-date the manner in which the society saves for retirement (Coronado, Julia Lynn, Don Fullerton and Thomas Glass, 2002)
On the other hand, for the reason that the increase in Social Security payroll tax rates for the purpose of covering the cost of the maturing pay-as-you-go system, the ratios have turned out to be unfavorable. For this reasons as well as a belief that the country be obliged to augment nationwide savings to realize the needs of an aging society, are amid the factors igniting reform agenda (Feldstein, Martin, 1996)
On the other hand, for the reason that the increase in Social Security payroll tax rates for the purpose of covering the cost of the maturing pay-as-you-go system, the ratios have turned out to be unfavorable. For this reasons as well as a belief that the country be obliged to augment nationwide savings to realize the needs of an aging society, are amid the factors igniting reform agenda (Feldstein, Martin, 1996)
Introduction Social Security known to be one of the biggest federal programs can be described as a social insurance system that is known to pay benefits to retired as well as disabled workers plus their family members, in addition to members of the deceased workers families. Statistically, there were about 53 million beneficiaries in the year 2009 of which 64% were workers who retired, disabled persons taking 15% and the rest which is 21% dominated by the survivors who are members of the deceased retired workers as well as the disabled workers (Social Security Administration (SSA), 2010)
Introduction Social Security known to be one of the biggest federal programs can be described as a social insurance system that is known to pay benefits to retired as well as disabled workers plus their family members, in addition to members of the deceased workers families. Statistically, there were about 53 million beneficiaries in the year 2009 of which 64% were workers who retired, disabled persons taking 15% and the rest which is 21% dominated by the survivors who are members of the deceased retired workers as well as the disabled workers (Social Security Administration (SSA), 2010)
The Social Security trustees and other panelists and commissioners who have examined the issue also share the same view (Nuschler, 2010). Recommendations Firstly, the standard age for retirement must be raised to 67 (Hanushek & Maritato, 1996) as it would facilitate in the restoration of long-range solvency to the Social Security System (Nuschler, 2010)
Retirement-income levels must also be raised for retirees who are short of considerable savings beyond Social Security. Thus, the Social Security reforms must aim towards having "the sum of the traditional benefit and personal retirement accounts increase their replacement rates, not reduce them" (Liebman, 2005)
Approximately 156.3 million workers were covered by Social Security in 2010 (Nuschler, 2010)
Instead of government-run, pay-as-you-go systems, a unique system must be encouraged that could allow the workers to get hold of the money and provide for their retirement by putting it in their individual accounts. However, all the changes must be aimed at assuring that the expenses and outflows "in any year can be covered by revenues, but that these revenues not exceed expenditures" (Saving, 2010)
However, the average retirement age has increased to 70 for most people because of economic necessity and choice. (Trumball, 2011)
This will be a Pareto improvement. The most common approaches to privatization will reduce distortions because they offer long-term relief in an effort to protect the value of previous contributions (Brown, Liebman & Wise, 2009)
Change demands that persons engage in something they have not done before. In change implementation, people are often the most crucial resource, barrier, supporter, and risk in change management (Cross, 2010)
These benefit reduction proposals are some of the simplest and cheapest to implement. If future clients expect lower benefits, they are expected to save more or work longer; all of which will have a positive effect on the economy (Midgley, 2006)
5% increase in payroll taxes. This small increase, the authors argue, would be more than offset by expenditures related to a displaced worker or by the government footing the bill for a citizen's medical needs (Graetz and Mashaw 1999)
The issue of healthcare is a major difference between the social insurance system of the United States and that of the true welfare states in Europe. Thus, despite the country's undisputed leadership in scientific research, it is a sad irony that an estimated 44 million Americans could not afford adequate medical care (Japsen 2002)
Because of this growing problem, many lawmakers are agitating for further changes to the social insurance system. In the early 1990s, for example, Senator Edward Kennedy, for example, is pushing for a universal health coverage program that would help allay the number of uninsured people, the prohibitive price of long-term care, the rising costs of medical care and the impending collapse of many health care institutions (Kennedy 1990)