The government now spends over $700+ billion a year on Social Security benefits. Why don’t we...

The government now spends over $700+ billion a year on Social Security benefits. Why don’t we leave it to individuals to save for their own retirement? In order to achieve true federal debt reduction is it reasonable to alter the current Social Security Trust Fund model? What would you propose to change?

Expert Solution

Social Security Benefits are essential to meet certain basic needs of all the citizens of a country irrespective of their age, social status, education, employability etc. It is essential because govt cant let its people starve to death or die due to a disease even if the person has not saved anything for himself. This is so becuase if a person works for 55 years of his life and he is promised a pension by his employer but somehow the employer i.e. a pvt company fails to honor its promise and does not give any pension the person will become helpless. Such situations have occured in the past. The companies have simply told the employees that they no longer have the capability to pay. So the $700+ billion spending of the govt for the social security of its people is essential for a healthy and just society.

But on the other hand the federal debt is an issue which needs to be handled, as perpetual debt is not healthy for any economy. But removing social security is not the correct measure to be taken for this. What can be done is the

social security benefits may be re-evaluated,
taxes may be increased progressively, i.e. rich pay more.
tax subsidies on big oil, gas and coal shall be removed
corporations using offshore tax havens should be stopped etc.

Rahul Sunny answered 2 years ago

social security benefits received during the year?

how do we treat retirement and social security problem? A government report concluded that Social Security...

how do we treat retirement and social security problem? A government report concluded that Social Security will be insolvent in 2035 and Medicare will be depleted by 2026. What do you think of the social security and retirement problem in the upcoming 20 years? What policy needs to be made? Should we take any actions or we should just wait?

Tax Drill - Social Security Benefits Determine the taxable amount of social security benefits for the...

Tax Drill - Social Security Benefits Determine the taxable amount of social security benefits for the following situations. If an amount is zero, enter "$0". a. Erwin and Eleanor are married and file a joint tax return. They have adjusted gross income of $36,000, no tax-exempt interest, and $12,400 of Social Security benefits. As a result, $_____ of the Social Security benefits are taxable. b. Assume Erwin and Eleanor have adjusted gross income of $12,000, no tax-exempt interest, and $16,000...

The state government collects $400 billion in tax revenue during the current fiscal year and spends...

The state government collects $400 billion in tax revenue during the current fiscal year and spends $415 billion. Which of the following is true? a. The government is running a cash flow surplus. b. The national debt will decrease by about $15 billion. c. The government will cut taxes to cover this shortfall. d. The national debt will increase. Assume a convex utility function with an interior solution in which a consumer chooses some of each good. Which of the...

a.[6] Why is the current structure of benefits and funding for U.S. Social Security expected to...

a.[6] Why is the current structure of benefits and funding for U.S. Social Security expected to be unsustainable without a change in the Social Security law? Give as complete a set of reasons as you can. b.[6] Suppose that the only change in the law is a single fixed percentage change in the benefits paid. Every recipient would receive a fixed percentage of the benefit they would receive under current law. Estimate that percentage under the assumption that it will...

Suppose the average Social Security benefits in the nation are $12,000 per year. The number of...

Suppose the average Social Security benefits in the nation are $12,000 per year. The number of social security pension recipients is currently 50 million. There are 150 million workers in the workforce this year and the average taxable wage per worker is $25,000 per year. Suppose the number of Social Security recipients increase to 100 million in 20 years, while the number of workers decreases to 100 million. Assuming nothing else changes, calculate the tax rate on wages necessary to...

Suppose that investment demand increases by $700 billion in a closed and private economy (no government...

Suppose that investment demand increases by $700 billion in a closed and private economy (no government or foreign trade). Assume further that households have a marginal propensity to consume of 90 percent. (a) Compute four rounds of multiplier effects. Instructions: Enter your responses rounded to the nearest one decimal place. Changes in This Cycle's Spending (in billions) Cumulative Change in Spending (in billions) First cycle 700.0 700.0 Second cycle Third cycle Fourth cycle (b) What will be the final cumulative...

3. Suppose Social Security (government old age income support program) benefits are reduced by 25% in...

3. Suppose Social Security (government old age income support program) benefits are reduced by 25% in an effort to make the program more financially viable, while Social Security payroll tax rates are left unchanged. a) How would this likely affect annual hours of work among workers close to retirement age (say, age 60)? Explain. b) How would this likely affect annual hours of work among young workers (say, age 25)? Explain. c) Would your answer for young workers be different...

Government: What is the current politics around the Social Security Fund? Is Social Security in crisis?...

Government: What is the current politics around the Social Security Fund? Is Social Security in crisis? What are some suggestions from both sides of the political aisle to strengthen Social Security?

why we Needs the Security Administration Tools, and what is benefits from these tools?

Question