I need help. I know the list of recommendaions provided by the site but how do y
ID: 371762 • Letter: I
Question
I need help. I know the list of recommendaions provided by the site but how do you keep social security solvent and how is it rational?
Using this website: http://crfb.org/socialsecurityreformer/ pretend you are a politician advancing a bill to"reform" social security. You may also condsider other "fixes" that are not included in the online tool. Post a list of the changes you would recommend and for how long that would keep social security solvent, a paragraph on why you think these are rational reforms to make, and a paragraph on what arguments your political opponents would make against your proposal.
Explanation / Answer
Present social security regulation aims to provide assistance to retired persons and persons with disabilities based on the growth in Consumer Price Index for Urban Wage earners and Clerical Workers (CPI-W). However if we move towards a connected consumer price index then it can provide enormous advantages because past tendencies prove that consumers tend to purchase less when prices of goods increases and during the period of depression.
Bureau of Labor Statistics have kept a track on the expenditure habits of the senior citizens by putting into use a tentative index known as CPI-E and there are few supporters who contend that assistances should be based by following that index.
However a research study conducted by the Federal Reserve Bank of New York have established that if the CPI-E index was implemented then assistance levels would intensify and the trust reserves would get bankrupt within five years.
As per present rule the normal retirement age (NRA) are for those who attain the age of 67 however there is a suggestion to fix the NRA at 70. As US people tend to live for a longer period of time Congressional Budget Office assesses that by increasing the social security’s entitlement age limits would help to enhance the magnitude of the labor force and the economy considerably by above two percent in the future but however it’s significant to acknowledge the fact that modification could affect those who otherwise would have registered in Medicare would encounter enhance premiums and out-of-pocket expenditures for health care.
However if the overall scheme is privatized then it needs to ensure a minimum level of assistance for each person but if any payroll tax collections that surpasses the set limit then it should be placed in a social security account which can be regulated and controlled by the prescribed regulations of the act thus beneficiaries should be provided with an option to invest their surplus funds in their choice of accounts which should be correlated with market securities and bonds.
There can be an alternative approach that can be adopted and that is to lessen the assistances provided to retired person who are better off economically. Thus the agenda should be to adopt a target based approach and provide assistance to those who needs it the most.
However some researchers believe that such strategies and course of action if adopted can reprimand individuals for conducts that should be stimulated and cheered such as working and saving and believes that social security system might not get the needed community backing to implement the said program.
Kaiser Family Foundation conducted a detailed research work on the retirement prospects for the forthcoming age groups for the elderly people which was based on the growing health care expenditures and an estimation of nominal earnings that can be expected for people in that prescribed age group.
Approximately out of five people three in the age bracket of 65 years and above were found to be getting more than half of their earnings in the form of social security assistances thus it was concluded that around 90 percent for majority of the people source of earnings was in the form of social security assistances.