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Social Security


Social security is a concept of paramount importance amongst the Americans. It is also known as Old Age, Survivors and Disability Insurance (OASDI). It is the money collected to cater for this category of people and is funded by payroll taxes from current employees and their employers as required by the Federal Insurance Contribution Act (FICA). Both the employee and employer contribute a total of 12.4% each contributing 6.2 per cent of their earnings (Lee & Yamagata, 2003). The funds are intended to ensure that all Americans live a better life after employment and when they attain an age whereby they are unable to work. Although the funds have good intention, it is high time that the Americans and other policy makers have to relook at the position and discourage the concept (Kingson & Altman, 2011). Americans should be against social security benefits because of a weak economy, longer expected life spans of citizens, and potential FICA tax raises. The government will not be able to sustain this program under its current structure. Under its current pay as you go system funds will eventually deplete. By the 2030’s only 75% of benefits will be paid, leaving the current taxpayers being cut short on their potential benefits while they have sacrificed years of income to that program through taxes.

Case against social security

As aforementioned, social security fund is one of the most famous federal programs initiated by the Americans. It is, however, imperative to point out that it is the high time that this position should be given a different approach. The economic loss suffered by the participants of this program supersedes the benefits realized by the beneficiaries of this scheme (Kotlikoff, 2011). To start with, social security offers a very low internal real rate of return for an average participant. It is essential to point out that an individual would make more money if they failed to participate in this program and invest in an alternative retirement scheme such as 401k. For instance, the return on social security averages between 0-3% while that on stocks and bonds is well over 8%. The return on bonds would be even higher, and one should also note that stocks have annual dividends that would put the beneficiaries in a better financial position.

It is also prudent to note that that social security forces the participants who make very little money to contribute to the program thus worsening their economic success. The 6.2% of earnings contributed towards this program is quite a lot especially to middle income and low-income earners and depletes their income substantially (Skidmore, 2013). It, therefore, makes no sense to make a person suffer in their early years and enjoy in unpredictable future. Americans should be given an opportunity to save when they are better off than forcing them to save when they would put the money to better use. Curtailing wages of struggling Americans will only do more harm than good to the economy, and it would be wise to allow Americans to save at the right time (Skidmore, 2013). It is imperative to point out that, although the program is intended to encourage Americans to work more, save more and retire later, this objective may not be realized if the approach is not addressed adequately. American employees will not be motivated and consequently the overall productivity will be quite low. This will, therefore, have adverse effects on the economy of the Americans.

Another reason why the social security concept should be done away with is the fact that the program’s expenses have been increasing over time thus exceeding the cash receipts. Such a negative cash flow will demand that the employees are charged much more regarding taxes to cater for the expenses (Lee & Yamagata, 2003). Such an approach will only add salt to the injury of already drained employees. Taxing employees more money to cater for social security expenses will lead to a lack of motivation amongst the employees. Besides, a large part of their wages will be used to cater for such expenses thus leaving them with little or no funds to save and invest in other economically viable projects. It is, therefore, prudent for policymakers to come up with better programs that will be lea American economy to greater heights.

It is also worth noting that the social security program is regressive and fails to promote equality amongst the Americans. For instance, the program fails to define a level of income above which no taxes should be levied. This makes poor Americans continue contributing towards the program despite their little wages. Also, some of the benefits go to actually very wealthy retirees who in a real sense do not need them (Skidmore, 2013). This is despite that fact that some of the American employees who make these contributions live in very wanting financial status. On this note, it is also wise to point out that the program fails to take into account the likelihood of the employee or the participants receiving benefits.  For instance, employees suffering from terminal illnesses such as cancer, with low life expectancy, are also expected to contribute despite having very low odds of receiving the benefits.

It is also wise to point out that the program may not be sustainable in future if the current trend is something to go by. For instance, the current social security payroll tax revenues are said to exceed the benefit payments. Nevertheless, the demographic changes ahead are likely to distort this balance thus making its long terms sustainability impractical (Skidmore, 2013). The aging population is likely to increase in the coming years thus increasing the number of social security beneficiaries. It is estimated that by 2025, most of the American population will be over 65 years thus increasing the number of beneficiaries. With increased health standards amongst the American population, it is expected that life expectancy will also significantly increase thus increasing the number of the elderly people who are dependent on the security fund (KARCH, 2008). If this trend continues, then the social security’s combined reserves are likely to be depleted by 235thus making the long-term sustainability of the program difficult to realize.


In a nutshell, social security is a federal program that all Americans and policy makers should strive to ensure that it comes to an end.  Although the program has good intentions of taking care of the old and the physically challenged, the disadvantage that comes along with the program supersedes the benefits. It leads to increased dependency on the government and overall economic slowdown amongst the American population (Kotlikoff, 2011). The program has adversely affected the saving culture in America as most of the employees are forced to contribute to the program leaving no funds for savings or investing in other economically viable investments. It is, therefore, essential for the government and other policy makers to come up with other retirement insurance schemes and do away with the social security to enhance the economy of the United States. The program also lacks rationale as it encourages the transfer of payments from young working population to older non-working generations and thus denying employees an opportunity to enjoy fruits of their labor (Kingson & Altman, 2011). It is also essential to note that long-term sustainability of the program is also a doubt, and hence, it’s high time that the policy makers find an alternative way of looking after the old and disabled if at all it is deemed necessary.



KARCH, A. (2008). Pension Puzzles: Social Security and the Great Debate – By Melissa Hardy and Lawrence Hazelrigg. Governance, 21(4), 607-609. http://dx.doi.org/10.1111/j.1468-0491.2008.00415_3.x

Kingson, E. & Altman, N. (2011). The Social Security Retirement Age(s) Debate: Perspectives and Consequences. Public Policy & Aging Report, 21(2), 3-9. http://dx.doi.org/10.1093/ppar/21.2.3

Kotlikoff, L. (2011). Fixing Social Security – What Would Bismarck Do?. National Tax Journal, 64(2, Part 1), 415-428. http://dx.doi.org/10.17310/ntj.2011.2.07

Lee, R. & Yamagata, H. (2003). Sustainable Social Security: What Would It Cost?. National Tax Journal, 56(1, Part 1), 27-43. http://dx.doi.org/10.17310/ntj.2003.1.02

Skidmore, M. (2013). Medicare, the Affordable Care Act, and the Long Campaign Against Social Security: Dodging the Bullet in 2012. Poverty & Public Policy, 5(4), 385-398. http://dx.doi.org/10.1002/pop4.55

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