Social Security Paper: History, viewpoints, ways to change system

Essay by DancinqtepHigh School, 11th gradeA+, March 2005

download word file, 4 pages 5.0

Social Security Research Paper

During the Great Depression, the economy was crashing, thousands of people were losing their jobs, and businesses went bankrupt. So, on June 8, 1934, President Franklin D. Roosevelt announced to congress that he would provide a program for Social Security. He created the Committee on Economic Security to investigate the problem of the economy and to provide any solutions to this problem. Eventually, on August 14, 1935, President Roosevelt passed the Social Security Act. The act was designed to help people in need of general welfare and to pay retired workers, aged 65 or older, a continuing income after retirement to protect them from poverty. The program later changed to include unemployment insurance, old age assistance, and aid to dependant children and the elderly. Social Security benefits, which are paid monthly to nearly 46 million people, are the backbone of the nation's entire retirement income system.

Employees are required by law to pay 7.65% of their income, while their employers match this amount. Of this 7.65%, 6.2% is actually payment for Social Security, while the other 1.45% is payment for Medicare benefits. This process continues until the employee makes his or her first $90,000. After that, they will only be required to pay 1.45% of their income until the end of the year, when the whole process will repeat itself again. For many years this program has worked successfully because the number of people paying for the program, or the current workers, has been more than the number of retirees, or the non-workers. The current problem with Social Security is that as the baby boomer generation slowly reaches retirement age, social security strategists predict that the situation will be flip-flopped. Therefore, there will not be enough money coming into the program fast enough to support this...