In the United States, Social Security refers to the Old-Age, Survivors, and Disability Insurance (OASDI) federal program. The original Social Security Act (1935) and the current version of the Act, as amended, encompass several social welfare and social insurance programs. The system has shown to be beneficial throughout its history.
When first adopted, social security covered about 60 percent of the work force. Over the years, it has expanded coverage to include the self-employed, many state and local government employees, federal workers, and employees of nonprofit organizations. Today, approximately 95 percent of all workers are covered by social security.
The program was designed to be a self-supporting federal program, financed with payroll taxes and providing not just retirement income, but a host of other insurance programs as well. There are four distinct types of benefits provided:
The Personal Responsibility and Work Opportunity Reconciliation Act of 1996.
This "welfare reform" legislation, signed by the President on 8/22/96, ended the categorical entitlement to AFDC (Aid to Families with Dependent Children) that was part of the original 1935 Social Security Act by implementing time-limited benefits along with a work requirement. The law also terminated SSI eligibility for most non-citizens. Previously, lawfully admitted aliens could receive SSI if they met the other factors of entitlement. As of the date of enactment, no new non-citizens could be added to the benefit rolls and all existing non-citizen beneficiaries would eventually be removed from the rolls (unless they met one of the exceptions in the law.) Also effective upon enactment were provisions eliminating the "comparable severity standard" and reference to "maladaptive behavior" in the determination of disability for children to receive SSI. Also, children currently receiving benefits under the old standards were to be reviewed and removed from the rolls if they could not qualify under the new standards.
It is a logical impossibility for Social Security to go bankrupt. We can voluntarily choose to suspend or eliminate the program, but it could never fail because it “ran out of money.” This belief is the result of a common error: conceptualizing Social Security from the micro (individual) rather than the macro (economy-wide) perspective. It’s not a pension fund into which you put your money when you are young and from which you draw when you are old. It’s an immediate transfer from workers today to retirees today. That’s what it has always been and that’s what it has to be–there is no other possible way for it to work.
Though social security program is very famous, still it is also a misinterpreted and misunderstood program offered by governments. These programs offer two objectives; its first objective is to strive for the settlement of income floor or minimum wage that can assist people to eliminate themselves from poverty line. Its second main objective is to supersede income from some past job or work. The first objective of the social security program is considered to be a sort of insurance against poverty whereas its second objective is supposed to be a scheme that force people towards savings. The objectives of the social security can be achieved by other means as well but social security is more convenient and effective way.
Yes. Our Social Security System--possibly the greatest financial investment available to every American--has been misunderstood, maligned and ignored by nearly everyone. The system is not meant to be just a retirement plan, it is more precisely a safety net for all Americans providing rudimentary retirement, disability and medical coverage at all ages to nearly all Americans.
Many people think of Social Security as just a retirement program. Although it is true that most of the people receiving Social Security receive retirement benefits, many others get Social Security because they are:
A spouse or child of someone who gets Social Security; or
A spouse or child of a worker who died; or
A dependent parent of a worker who died.
Depending on your circumstances, you may be eligible for Social Security at any age. In fact, Social Security pays more benefits to children than any other government program.
Occasionally, I run into people who believe that no one in his right mind would design a retirement income system like the one we have. Some of the details do seem far from satisfactory to me. However, looking at the big picture, this structure makes sense. Mandated savings makes sense if you think that many workers would not provide themselves a reasonable replacement rate. This is not just an issue of avoiding poverty, but one that extends quite far up the income distribution. Mandating annuitization makes sense if you think that workers to not adequately understand the value of annuities.
First, I argue that social security programs around the world link public pensions to retirement; people do not lose their pensions if they make a million dollars a year in the stock market, but they do confront marginal tax rates up to 100 percent if they choose to work. Second, after arguing that most existing theories cannot explain this fact, I construct a positive theory that is consistent with it. The main idea is that pensions are a means to induce retirement--that is, to buy the elderly out of the labor force because aggregate output is higher if the elderly do not work. This modeled through positive externalities in the average stock of human capital: because skills depreciate with age, the elderly have lower-than-average skill and, as a result, have a negative effect on the productivity of the young.
Despite its flaws, the Social Security Act of 1935, was a significant achievement in that for the first time the government had a responsibility for the individual welfare of all Americans. It established a number of programs that provided for the material needs of individuals and families. The Social Security Act reflected the humanitarianism of the 1930s as well as the inclination of Americans in those years to seek security and group acceptance. Although the Act faced some problems along the way, it provided the economic security that the American people desperately needed during the post-Depression era.
Social Security is the most successful social program in American history. It shouldn't be privatized; its benefits shouldn't be cut; and the retirement age shouldn't be raised.
Before Social Security was established 75 years ago, more than half of our elderly population lived in poverty. Because of Social Security, the poverty figure for seniors today is less than 10%. Social Security also provides dignified support for millions of widows, widowers, orphans and people with disabilities.