This essay deals with a very important issue facing America, namely Social Security. Social Security was introduced 87 years ago to provide minimum income protection for retiring seniors. Pensions and Social Security benefits is the biggest expenditure of the federal government topping Medicare and Medicaid, and national defense.
Social Security has a peculiar form of financing called pay-as-you-go. This means that your contributions instead of going to your Social Security fund are collected by the government and used to cut checks for current retirees. What is left the government puts into the general fund and spends leaving only IOU receipts. As a result, the government owes today $2.9 trillion to Social Security. When there is YOUR turn to retire, your SS benefits will be paid by younger workers. This system worked perfectly in the 50s and 60s when there 40 or 50 workers for each retiree and average life expectancy was about 70 years. Today, however, when there are only 2-2.5 workers for each retiree (and current retirees live longer – average up to about 80 yrs), the system is on the brink of bankruptcy and may last only 12-13 years .
Please read these two articles (start with Spend As You Go) and comment whether you support (or not) an idea of voluntary Social Security accounts proposed by President Bush in 2005 where your contributions go directly to YOUR account instead to the government. You will control how the money is invested. When you retire your Social Security benefits will be calculated based on the amount of money in your account. The sad thing is Congress never acted on this proposal. Remember, you will be graded on the quality of the argument and NOT if you agree with articles or not.
The format is as usual: two pages and double spaced. Please email the article to me as attachment using Ms.Word or pdf. Due date is Monday, April 4, midnight.