FREE ESSAY ON AUTHOR UNKNOWN

AUTHOR UNKNOWN

I. Nature of the Problem
Social Security is not a problem right now; in fact, it runs a large surplus every year.
However, 
Americans are living longer, and drawing more Social Security payments than they ever put
in. Early in the 
next century, we will be paying out more than we take in, and Social Security will have
to dip into its 
surplus, which is currently used by the federal government for other spending. When the
last of the baby 
boomers retire, the payroll tax would have to almost double to maintain benefits. This
creates an undue 
burden on Generation X-ers, and solutions need to be found to prevent this from
happening.
II. The Solution
* Citizens should be given a choice on whether or not they wish to invest their own
Social Security funds in 
a high-yield bank account, or the stock market.
Right now, the average American has withdrawn all he has put into Social Security within
7 years 
of retirement. This forces the everyday worker to support those currently on Social
Security with his 
payments. Whoever is still in the work force should be given the opportunity to do with
their money as they 
see fit. If someone feels that they are unable to invest wisely in the stock market,
there are other options 
available. For instance, and perhaps the simplest, is to invest the funds into a
money-market account, which 
will on average receive 1-1 1/2% more interest than a traditional savings account. From
the time the 
average American starts working - say 16 or 17 - till the time he retires, there will be
a lot of money that 
has accumulated in this account. Another option is a tax-sheltered annuity. This is an
option available to 
anyone - as long as they have an investment broker - to take a certain amount of money
from their 
paycheck, tax free, and have it invested and re-in!
vested in stocks and bonds. It can be cashed out at any times. Many banks offer
tax-sheltered annuities for a 
moderate commission. The last, and most risky option, is to invest the funds in the stock
market. This is 
done preferably for national security reasons. For instance, if the government bought
stock in mass 
quantities, a bull market could be created, and the market could crash, and the
government could potentially 
lose billions of dollars. However, every American is not going to invest in the stock
market, and those who 
do are not going to buy the massive quantities of stock that the federal government
would. This would 
provide a lot more safety for those investing, and if the market did crash, citizens
could not sue the federal 
government for the loss of their money.
* Retirement age should be raised to 70.
When Franklin D. Roosevelt created Social Security amidst the Great Depression, the
average 
American could only expect to live to the age of 60. The retirement age was set at 65. So
on the average, 
most people never would live to collect their Social Security. Today, the average
American can expect to 
live to the age of 76. That is a huge life expectancy change, and Social Security policy
should be changed 
to reflect it. By setting the retirement age at 76, we are giving our average senior
citizen 6 years to enjoy his 
retirement, while policy makers of the past gave him -5 years. This should take effect by
the fifth fiscal 
year after its passage in Congress.
* Adjust the CPI by -1.1%
Right now, the CPI (Consumer Price Index), which is used to measure the level of
inflation, 
overestimates inflation by 1.1 percentage points. Since the CPI dictates how much Social
Security 
payments must increase throughout the year due to inflation, any over-estimation would
cost the 
government billions of dollars. By reducing the CPI by 1.1%, the federal government would
save $1 trillion 
over 12 years. 
* Means-Test Social Security
Social Security is an entitlement program, which means that government funds are
automatically 
provided to people that meet certain criteria. Social Security is an entitlement program
in that anyone over 
the age of 65 qualifies, regardless of their income. 40% of retired persons depend on
Social Security as 
their only means of income. However, people like Ross Perot, and Bill Gates, and other
multi-millionaires, 
are eligible for social security. What means-testing refers to is that if someone did not
need Social Security, 
they would not be eligible to get it. Those who can support themselves through retirement
at $50,000 a year 
should not be eligible for it.