Social Security

In reading the book "Social Security and the Family" I learned a lot about the system that I had no idea about before. The book was fact filled and almost fun to read the need to know information. I gained much knowledge in the specifics of why the social security system is in need of reform, and why it will be inadequate in the years to come. One of the reasons our social security system isn't working is because, "Social Security was modeled on the single-earner, married-couple family" (1). Times have changed dramatically since then.

When assessing the issues and current structure of the security system for change,

"Four elements characterize the objectives of most tax expenditure programs, including Social Security" (179). A few of these issues are related to recent subjects addressed in class. The first discussed is Income adequacy," or the extent to which the program distributes more resources to those who are worse off than to those who are better off, typically measured by annual income. One important measure of the programs success in meeting this objective is its antipoverty effectiveness" (179). Since poverty is one of the main reasons for reform, this is a good issue to have been discussed. The second is individual equity, "based on the idea that individuals should get what they pay for" (181). The problem with this issue is that many people are not getting back all they deserve. The third discussed as in class is horizontal equity, "or the equal treatment of individuals in equal circumstances" (181). The idea behind horizontal equity is to give families with about the same earnings, equal benefits. Under our current system, however, these circumstances are not met. "Single parents often have access to fewer benefits, even if they worked steadily for many years, than do persons in long-term marriages who have not worked, made payroll contributions, or raised any children" (181). This absolutely violates the principle of horizontal equity. The fourth and final objective discussed is efficiency, "which translates into trying to achieve the greatest good for lowest cost. One measure of efficiency is whether the effect of additional earnings on lifetime benefits of a couple is the same when only on spouse works and when both spouses work" (182). This also stems back into our class discussions in the subject of economic efficiency and how being most efficient when the consumer (Social Security beneficiary) and the producer (Social Security system funds) are both at a surplus. Before reading the books I never anticipated being able to connect it to the Public Policy class so readily. More importantly these policies mustn't be overlooked .

The central argument of the book is to solve the problem of insufficient funds. Our system now is flawed and must be changed. A quote that interprets very well a small part of what U.S citizens are facing and what must be reformed:

Lawmakers should strive to improve Social security so that it adheres to principles of fairness and efficiency. In the difficult process of reform, it would be a mistake to ignore features of Social Security that increase real spending annually by hundreds of billions of dollars but provide little additional antipoverty protection, penalize couples simply because both partners have significant earnings, and give minimal protection to many single and divorced mothers who work and raise children, while providing large transfers who do neither. (16)

Basically being overwhelmed after reading the last passage to myself, I realized what a major problem we really have to deal with. I want to give a little back round on one of the many reforms discussed in the book, plus how it would work.

One of the more discussed subjects is the issue of woman. Women are talked about a great deal and seem to be suffering the most. One reform that is projected to work well for woman and has a basically good idea is the Carve-out reform which basically takes money strait from their paycheck and throws it into a private account that can be used to their own desire. When doing a study on what the results would be with such a program, the results were as follows:

Among the various groups of woman, married woman benefit most from a carve-out reform; 94.9 percent are better off, assuming a 4 percent return. Widows are next, with 94.0 percent benefiting, and never-married woman are third, with 85.8 percent of them better off. Divorced woman do only slightly worse than other groups, with 85.0 percent of the woman benefiting