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A Report on American Economics in English Includes Social Security
Dátum pridania: 30.11.2002 Oznámkuj: 12345
Autor referátu: neuvedeny
 
Jazyk: Angličtina Počet slov: 2 151
Referát vhodný pre: Stredná odborná škola Počet A4: 7
Priemerná známka: 2.97 Rýchle čítanie: 11m 40s
Pomalé čítanie: 17m 30s
 

198) The ability of the
United States Government to raise money to meet the requirements of the
social security should be no more in doubt than the governments ability
to finance the national defense, the housing programs, the State
Department, or any of the other activities that the federal government
gets involved in.
By paying out benefits equally to all participate in Social Security-
that is by not relying so heavily on total payments in making the
decision to pay out benefits, the system is able to pay benefits to
people who otherwise may not be able to afford an insurance program that
would provide them with as much protection. One of the main reasons for
the government's involvement in this program, is its ability and its
desire to provide insurance benefits for the poor and widowed, who under
the private market, might not be able to acquire the insurance to
continue on a financially steady course.
The government, then, is in a totally unique position to pay out
benefits that would be out of the reach of many American families. Another great advantage of this system,
is the ability of the government to adjust the benefits for
the effects of inflation(Robertson p.134)

INFLATION AND SOCIAL SECURITY

Private insurance plans are totally unable to adjust for the effects of inflation with complete accuracy. In order for an insurance company to make this adjustment, they
would have to be able to see forty-five years into the
future, with twenty-twenty vision. When a private pension
plan currently insures the twenty-year-old worker, it can
only guarantee a fixed income when the worker reaches sixty-
five and a fixed income is a prime victim of inflation
(Robertson p.332) In order to adjust for that inflation, the
private insurance firm would have to be able to predict what
the inflation rate will be from the moment the worker is
insured until the day he dies, and then make the complex
adjustments necessary to reflect this in the pension plan. An inflation estimate that is too small will result in the
erosion of the workers retirement benefits.
Because the government, unlike the private insurance
firm, can guarantee that it will exist well into the future, and will
have the continued income of the Social Security tax to draw upon, it
can make on-the-spot adjustments for changes in the inflation rate. Some
adjustments, in fact, have been automatic in the recent years, therefore
relieving the pensioners of the periodic worry of whether this years
benefits would be adjusted, or whether the level of payments would
remain stable, thereby, relative to the cost of living, making them
poorer that ever before(Stein p.28).

In the face of the government's ability to make those
necessary adjustments and to continually finance the Social
Security program, many opponents of the system argue that
the government programs are driving out the private
insurance industry. The statistics remain otherwise. SOCIAL SECURITY FINANCING

The social security tax is one of the fewest taxes in
the United States, and the only federal tax in the country,
that is given for a specific purpose.
 
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