During the last class session we discussed different social programs that are either age-based or income-based, for instance Social Security, Supplemental Security Income, Medicare, Medicaid, Terminal and Whole Life Insurance. I agree with the classmates who said that people are abusing the system and collect benefits that they are not eligible for, that is why so many programs that were created to eliminate poverty and help the most needy citizens have a bad reputation nowadays. The article that I found on-line gives an example of a truly needed person Bill Ricker – a former pastor who lives in an aging trailer and completely relies on Social Security benefits that constitute $12,036. Of course comparing to the Russian standard of living it is more than enough money to live on, but in the U.S. where the services are so expensive this money is not enough, especially for an elder man who needs prescribed medications, and whose heating bills are outrageous ($3,200 per year on kerosene to keep the trailer warm). He became disabled and therefore cannot work and has to fully depend on his Social Security benefits that go towards paying for heating costs, rent for the lot where his trailer sits and basic costs of living. The social programs were created for people like Bill Ricker, but unfortunately they are abused on regular basis. The article makes an excellent point that so many people claim themselves disabled to work but they are not disabled to use drugs, to break into the houses and steal or to waste money on gambling and alcohol.
During the time of the economic recession there is a growing number of proponents of decreasing the Social Security benefits and Supplemental Security Income. Moreover people are worried that there will be not enough funds in a couple of decades to pay the benefits to people who are working now, but at the same time according to the CNN article, Social Security is paid to deceased beneficiaries. According to the general estimates the agency has made $40.3 million in erroneous payments. While the politicians keep talking about the fund that would run out of money it was estimated that nearly 2,000 deceased beneficiaries were receiving benefits for months or even years after the agency had been notified of their deaths. The audit also found that of the approximately 2.8 million death reports about 14,000 - or one in every 200 deaths - are incorrectly entered into its Death Master File which leads to the erroneous payments. From my point of view it is important to fix the system first and then talk about the decrease of the benefits because there are people out there who truly depend on these programs and who deserve every penny they get!
Here are the links to the two articles that I found:
http://www.sunjournal.com/our-view/story/1089856http://money.cnn.com/2011/09/07/pf/social_security_benefits_deceased/
I agree with Paulina in that there are many people who truly depend on, and deserve, the social programs that have been put in place to help those in need. However, I do not agree with her sentiment that the current Social Security system is capable of handling a large influx of beneficiaries by simply fixing the current "flaws" in the system. The Baby Boomers are a very large group of people who will live longer than any generation before them has. The system that is currently in place is simply not capable of giving future beneficiaries what they are expecting. When Social Security was established, there were more people paying into the system than were collecting. This gap is quickly narrowing and unless change occurs, the benefits owed will be far greater than what is coming in. Paying deceased beneficiaries is clearly a wasteful and careless practice, but I feel that even if this problem was corrected, the system would still need reform in order to be effective in the coming years.
ReplyDeleteSince the problem is so complex, ONE solution is not enough, that is why the scientists are talking about 8 solutions:
ReplyDelete1) incerease the payroll tax;
2) change the ceiling (nowadays after the money ceiling of $106,800 people do NOT pay any more Social Security). When Social Security was passed in 1935, the ceiling was $3,000 now it is growing, but not enough to cover the deficit.
3) Raise the retirement age from current 62
(with a reduced benefit) and 65 (with a full benefit) to older age since people are living longer.
4) Stop putting 100% of the trust fund in treasury bills, instead take a portion of money and invest it in the stock market.
5) Take money from the general tax revenue to coer the trust fund deficit.
6) Lower the benefits.
7) Mandate people who are in the state teachers' retirement program to pay into Social Security.
8) Privatization.
As you have correctly mentioned, Kayla, the current Social Security system will not be able to guarantee future generations what they are expecting, and there is NO single treatment/change (except privatization), therefore there is a need to apply more that one innovations to make the trust fund more stable.
This issue is so difficult to asses because there is no correct answer. One side of the argument correctly states that the current system is going bankrupt due to inferior funding and the incredible amount of fraud that people use to take advantage of the system. The other side of the argument is that there are many people who are truly in need and rely on such government programs to survive. I sympathize with people in need but I feel that the United States government is to lenient in the amount of people that qualify for aid. People with minimal education have no desire to seek work because their social security aid is the same amount they'd receive working at minimum wage. The abundance of free handouts has created complacency with current living conditions and is crippling the United States. The system needs to be reformed immediately but that scenario seems unlikely with the bickering between political parties that is cogging down our government.
ReplyDeleteDevin, you brought an interesting point of "the U.S. government being too lenient in the amount of people that qualify for aid", what eligibility requirements would you vote for?
ReplyDelete