Funding the Future of Social Security

An examination of a variety of restructuring plans that could prevent the current Social Security system to experience funding shortfalls in the next decade

The following paper discusses projections that the changing demographics of the American population will cause the current social security system to experience funding shortfalls in approximately a decade. This paper discusses the expected changes to the population and various solutions and opinions proposed by current economists, writers and politicians to stave off a threatened funding disaster.
“Social Security is a popular program; it has consistently pumped out millions of monthly checks for 44 million beneficiaries, has reduced poverty among seniors by two thirds over the last 40 years and has allowed people with disabilities to make ends meet (Consumer Reports, 2000).Social Security is a genuine contributor to the sturdiness of the economic system. It’s a promise to pay, secured by Treasury securities, which in turn are secured by taxpayers. The government has to use the money currently pledged for whatever the citizens decide Social Security benefits should be (Quinn and Ehrenfeld, 2000).However, the system is not a large bank account in which taxpayers contributions are set aside to pay them back their own money when they retire, as many Americans incorrectly assume. Although 145 million Americans pay part of every paycheck into the Social Security system, the money becomes part of a social insurance program that collects money today and uses it to pay benefits today. Economists call that pay as you go, but it is very similar to a Ponzi scheme. Ponzi was a swindler who represented that he had a way to make money by utilizing international postal coupons to take advantage of changes in currency exchange rates.”