Social Security
Our society has gone through tremendous change in the last 100 years.Thanks to tremendous advances in medical technology, life expectancy hasbeen increased significantly. During that period, we also had a surge inthe birth rate starting shortly after the end of World War II. Theresulting generation was dubbed the "Baby Boomers" reflecting the boom inpopulation growth during that time. The oldest of these "Baby Boomers" arenow approaching or at the 50-year-old mark. The Baby Boomer generation isheaded for retirement and Social Security payments. Because of how socialsecurity is currently structured, they will rely on the generationfollowing them to support their retirement checks through the contributionsthe younger people make to Social Security. This leaves younger people feeling quite edgy about how SocialSecurity is structured, because economists predict that eventually, SocialSecurity will run out of money. When these younger people retire, willSocial Security be there for them, or will they support the Baby Boomers intheir old age only to find that when their turn comes, the funds are no Experts report that those approaching
They alsoknow that those changes are unpredictable and hard to forecast (Triest,1997). One likely effect would be arise in stock prices while other investment sources would likely losevalues: bond values tend to drop as stocks advance (Updegrave, 2002). Economists do have some history from which to draw parallels, however. There is actually no guarantee that this approach wouldimprove Social Security funding (Triest, 1997). However, economists know that whatever done will have effects onspending and savings habits both of contributors and recipients. The system is threatenedby this approach because although Baby Boomers were born into relativelylarge families, they themselves have largely opted for smaller families. While nearly everyone agrees that eventually something must be done toprovide adequate funds for Social Security, concerns for those justentering the workforce are particularly significant, since they face thepossibility of paying more now only to get less later. This "partial privatization" approach ispopular with many conservatives (Howling, 2003) including the currentPresident (Rich, 2001). Employerswould make no changes in how they contribute, and two-thirds of employeecontributions would still go into the Social Security trust fund (Rich,2001). 2-- a 33% reduction (Howling, 2003). They might want tosuggest to Congress that those most likely to be affected by decisions madeabout Social Security funding have ample representation in thedeliberations. However, this bringsincreased risk (Triest, 1997). Dean Baker, co-director of the Center forEconomic and Policy Research, is more optimistic, predicting that SocialSecurity can pay benefits until 2041, and that even if we delay takingaction until then, the benefits would still be higher in real-dollar termsthan they are now (Updegrave, 2002).
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