Advantages & Disadvantages of Social Security
Social Security is a society-wide retirement and insurance program carried out by the government to help care for people when they become old or infirm through illness. There are many benefits that come through the Social Security system, both for individuals and society at large. There are also, however, definite drawbacks of the system as it is now constructed that have been pointed out by critics. Social Security is a hotly debated policy concern.
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Security
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Social Security provides a definite safety net for all citizens, regardless of who they are or how much they earn. The risks of old age and illness are, to an extent, handed over to the society at large, where they can be managed through general policy. The security that Social Security provides to each citizen is hard to gainsay. This security makes it possible for citizens to take greater economic risks by knowing they'll be cared for.
Investment
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Social Security gives each citizen a greater stake in the greater society. Every citizen is required to pay into the Social Security system through their payroll taxes. Every citizen also benefits from the payments that they are guaranteed to receive after they reach a certain age. Through Social Security then, every citizen has a certain reason to stay engaged in matters of governance and how the finances of the government are managed or mismanaged.
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Finances
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The financing of Social Security has proved to be more problematic as time has gone on. Originally, the system was designed to pay for itself, as those citizens presently in the workforce would pay for those no longer in the workforce due to retirement. This equation has proven unreliable, as the number of workers in the workforce have begun to become outnumbered by those who are retired. The gap in funding threatens massive budget deficits.
Alternatives
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One of the disadvantages of the Social Security system as it is presently designed is that the money citizens contribute over a lifetime to Social Security could potentially yield higher returns if invested privately. Other investments, such as stocks, could yield a much greater sum of money than the Social Security system will ever pay out after retirement. In exchange for the security of Social Security citizens, pass up potentially large gains in wealth.
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References
- CNN Money: How Does Social Security Work?; 2011
- "Newsweek"; Social Security Is Middle-Class Welfare; Robert Samuelson; March 2011
- "Newsweek"; Let Them Go Bankrupt, Soon; Robert Samuelson; May 2009
- "The New York Times"; Safer Social Security; Peter Orszag; November 2010
- "The Atlantic Monthly"; Nine Misconceptions About Social Security; Dean Baker; July 1998
- CNN Money: Social Security -- More Going Out Than Coming In; Annalyn Censky; August 2010
Resources
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