Hi gang. Back from a long posting absence (been busy with work and family). Today’s post it about something that has been bugging me. It is fairly detailed so stay with me.
First some history about where social security came from.
In America (the US), Social Security refers to the Old-Age, Survivors, and Disability Insurance (OASDI) federal program. The original (the primary) Social Security Act (1935) and the current version of the Act, as amended, encompass several social welfare and social insurance programs.
Social Security is primarily funded through dedicated payroll taxes called Federal Insurance Contributions Act tax (FICA). Tax deposits are formally entrusted to the Federal Old-Age and Survivors Insurance Trust Fund, the Federal Disability Insurance Trust Fund, the Federal Hospital Insurance Trust Fund, or the Federal Supplementary Medical Insurance Trust Fund which comprise the Social Security Trust Fund. A lot of trust funds, huh?
Upward redistribution of income is responsible for about 43% of the projected Social Security shortfall over the next 75 years.
According to economist Martin Feldstein, the combined spending for all social insurance programs in 2003 constituted 37% of government expenditure and 7% of the gross domestic product. Social Security is currently estimated to keep roughly 40 percent of all Americans age 65 or older out of poverty.
People, social security is NOT an entitlement program. Social security is a program where we, people that live in the United States, give part of our earned income into a program where the money was suppose to have been put aside for our retirements. Over the years, Congress decided to start taking money from the fund and decided to fund it annually with taxes collected. Not such a hot idea.
Money that is owed to people who have been paying into the system should be paid back to them – that is basic good business and people who are saying it is an entitlement program need to understand this. Now – if you have people collecting benefits who have not paid into the system, that is a different story and I would agree with you that it isn’t fair.
One of the proposed fixes is to increase the age to collect social security. Fair enough but it has to be fair and there have to be incentives for people to continue to be in the program and government needs to show that they are taking care of people as they get older who have paid into it appropriately.
Stay well people.
June 05 2013
Kim Isaac Greenblatt
Social Security is NOT entitlement