The Social Security Problem in the United States of America

THE SOCIAL SECURITY PROBLEM IN THE UNITED STATES OF AMERICA

ABSTRACT

This research presents the Social Security problem in the United States of America. It includes what the Social Security problem is in the United States of America, what kind of dangers it brings, what should be done about it. Reader can find information about the reasons of the Social Security problem and the solutions which might be done for this problem.

In addition, this is one of the biggest problems of the Government of the US that it pays attention in these days. So, reader may opine about the problem with seeing the solutions that the Government presents.

TABLE OF CONTENTS

ABSTRACT …………………………………………………………………………………………. i

TABLE OF CONTENTS …….…………………………………………………………………. ii

CHAPTER

1. INTRODUCTION …………………………………………………………………………. 1

Context of the problem ………………………………………………………………. 1

Statement of the Problem …………………………………………………………… 7

Research Questions …………………………………………………………………….. 8

Significance of the Study ……………………………………………………………. 8

Research Methodology ………………………………………………………………. 9

Organization of Study………………………………………………………………. 9

2. REVIEW OF THE LITERATURE ……………………………………………………. 20

CONCLUSION ……………………………………………………………………………………. 20

BIBLIOGRAPHY………………………………………………………………………………….. 21

CHAPTER I

INTRODUCTION

Context of the Problem

Social Security trust fund is empty. More people believe in UFOs than in the future of social security.

Beginning in 2008, 74 million baby boomers will become eligible for retirement, and the Social Security system will begin to collapse. From that point on, we will have more retirees than ever and fewer workers paying into the Social Security system.

To put this into perspective, before the "baby boom" generation, there were 100 workers for every retiree, but as these same baby boomers begin to retire, that number is projected eventually to drop to merely two workers per retiree.

As we see, this is a really serious problem for the United States of America and serious solutions must be found as soon as possible. When we look at history of Social Security, we see this picture:

1935 - The Social Security Act, which covered workers in commerce and industry, was signed by President Roosevelt.

1937 - The Federal Insurance Contribution Act (FICA) required workers to pay taxes to support the Social Security system. Payroll taxes were 2%.

1939 - Social Security was expanded to cover dependents and survivors. Payroll taxes were 2%.

1950 - Coverage was expanded to job outside of commerce and industry, and benefit levels were increased. Payroll taxes were 3%.

1956 - Disability Insurance was created, and expanded over the following years. Early retirement at age 62 for women was permitted. Payroll taxes were 4%.

1961 - Early retirement at age 62 for men was permitted. Payroll taxes were 6%.

1972 - Automatic cost-of-living-adjustments (COLAs), which index benefits to inflation, were