social security

[swatiraohnlu]

In the US, Social Security is a social insurance program officially called "Old-Age, Survivors, and Disability Insurance" (OASDI), in reference to its three components. It is primarily funded through a dedicated payroll tax. Due to projected difficulties with social security programs, many have argued, including former president Bush, that social security should be privatized (at least partly). This is a situation in which individuals are given subsidized personal accounts ("individual accounts" or "private accounts") through partial privatization of the system. President Barrack Obama "strongly opposes" privatization.

Should social security be privatized?

 

[swatiraohnlu]

* Privatization during economic crisis would have been disaster. Privatization in the midst of the greatest economic downturn since the Great Depression would have caused households to have lost even more of their assets, had their investments been invested in the U.S. stock market.

* Privatizing social security would wrongly enrich banks. Privatization would represent a windfall for Wall Street financial institutions, who would obtain significant fees for managing private accounts.

* Privatization would hasten depletion of Soc Sec trust funds. Greg Anrig and Bernard Wasow. "Twelve reasons why privatizing social security is a bad idea." The Century Foundation.: "Diverting up to four percentage points of the payroll tax to create private accounts as the president has proposed would shorten significantly the time until the Trust Funds become depleted. In part, this is because funds now being set aside to build up the Trust Funds to provide for retiring baby boomers would be used instead to pay for the privatization accounts. The government would have to start borrowing from the private sector almost immediately to be able to meet commitments to retirees and near-retirees. As Figure 1 shows, the Trust Funds would be exhausted much sooner than the thirty-eight to forty-eight years projected if nothing is done. In such a short time frame, the investments in the personal accounts will not be nearly large enough to provide an adequate cushion.

* Privatization does not address long-term funding challenges. The program is "pay as you go", meaning current payroll taxes pay for current retirees. Diverting payroll taxes (or other sources of government funds) to fund private accounts would drive enormous deficits and borrowing ("transition costs").

 

[swatiraohnlu]

Social security taxes damage ability of poor to survive. Americans living at the poverty level must usually spend every cent of their disposable income just to survive. Few in the lower-middle class have the funds available to put into a wealth-generating retirement account. Thus, they must rely on social security income to pay the bills when they reach retirement age. Unfortunately, the current social security payouts are at or below the poverty level. The money you earn in benefits based on what you pay in is less than what you'd earn in a passbook savings account. Privatizing social security helps the poor.Critics of Social Security privatization often warn that such proposals hold serious dangers for the elderly poor. However, a closer examination of the evidence indicates that the poor would be among those who would gain most from the privatization of Social Security. By providing a much higher rate of return, privatization would raise the incomes of those elderly retirees who are most in need. Although the current Social Security system is ostensibly designed to be progressive, transferring wealth to the elderly poor, the system actually contains many inequities that leave the poor at a disadvantage. For instance, the low-income elderly are much more likely than their wealthy counterparts to be dependent on Social Security benefits for most or all of their retirement income. But despite a progressive benefit structure, Social Security benefits are inadequate for the elderly poor's retirement needs."

 

[dimpy.handa]

he protective social security programmes help the poor in removing/reducing contingent poverty. In India, the protective social security programmes have been designed to address the contingent poverty or the contingencies d defined by the ILO. These programmes take care of old-age income needs (Old age pension), survival benefits (Provident Funds), medical need of insured families (Medical Insurance), widow and children/dependant economic needs (Widow/Children/orphan, and dependent pension), maternity benefits, compensation for loss of employment and work injury benefits.