The state of Social Security in the United States Term Paper

The state of Social Security in the United States - Term Paper Example The increasing numbers of baby boomers and the recessive trends in the economy have been the major concern of the young people who are the main contributors to the social security funds of the state. The role of the state therefore, has become crucial, while incorporating the new developments in the societal changes of the time in their social policy so that state benefit can reach every one. Social security is primarily insurance programs for the old age, survivors and widows of earning members, disability sector, unemployed and the people who need state benefits to survive with dignity. Popularly known as OASDI or Old- Age, Survivors and Disability Insurance, its major funding for the same comes from taxpayers who have to pay contribution under Federal Insurance Contribution Act or FICA. The tax deposits is transferred to trust funds dedicated under different programs like old age and survivors insurance fund, federal disability insurance trust fund etc. When the revenues exceed ex penditure, the excess fund is invested in government ‘bonds’ that is non marketable and is often used by government as deficit spending. In recent times, it has come under huge controversy mainly due to myriad reasons like increasing number of baby boomers who have retired, the rising numbers of unemployed who are unable to contribute etc. and therefore the burden of contribution to social security fund has increasingly been borne by the current contributors. They feel that the fund might not be able to sustain their old age needs. The changing demographic equation and the old has necessitated reforms within the social security programs of United States so that new mechanisms can provide equity in state benefits to the various segment of concerned population. The following recommendations are designed to evolve innovative input into the state policy matter vis-a-vis social security. It is envisaged that new mechanisms would facilitate for effective and long term sustain able social security programs. 1. Introduce tax benefits and retirement age Coile and Grubber (2000) believe that retirement age should be redefined in terms of years that could maximize social security wealth. Indeed, the retirement age needs to become the personal choice of the working population so that they are able to significantly increase their post retirement benefits. It is found that the tax benefits vis-a-vis age becomes a major incentive for the working population, especially for higher age group who increasingly pay lower taxes. Hence, innovative tax schemes should be introduced so that younger people would be attracted to contribute more towards social security fund. The baby boomers have become major beneficiaries of social security funds. The increasing number of baby boomers has significantly impacted the labor market and reduced productivity vis-a-vis accrued income to expenditure. The baby boomers and retirees who are in good health must be encouraged to become pr oductive through self employment. This would help lessen the burden on the young working population. Social security number should become mandatory for all citizens so that social security umbrella could be extended to the legitimate citizens of America. It is also recommended that the immigrant population should be required to pay extra for their spouse and children until the time they become eligible for permanent citizenship. 2. Investment of SS fund for