1 / 21

Social Security

Social Security. Democrats and Republicans Competing visions of retirement. The debate. SOCIAL SECURITY. What is a Ponzi scheme?. How does Social Security work?. Introduced in 1935. Each generation pays for the generation ahead Taken out of payroll taxes.

ayla
Download Presentation

Social Security

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Social Security Democrats and Republicans Competing visions of retirement

  2. The debate SOCIAL SECURITY

  3. What is a Ponzi scheme?

  4. How does Social Security work? • Introduced in 1935. • Each generation pays for the generation ahead • Taken out of payroll taxes. • Currently has $2.6 trillion in funds. • Requires healthy ratio of workers to retirees.

  5. Reason to worry: population

  6. Reason to worry: life expectancy

  7. How is it funded? • Payroll tax. • 2011: took in $805 billion; paid out $735 billion. • 2.87 workers per beneficiary.

  8. Concerns • Baby boomers began retiring last year. • There is a projected shortfall that will cost $8.6 trillion over the next 75 years.

  9. Republican concerns • Ideological concerns: Social Security takes up 5% of GDP. • Should the government be able to control your retirement? • Should you have to pay today for tomorrow’s retirees?

  10. Republican proposals • Privatization: • Individual retirement accounts invested in the financial markets. • Possibility of higher rate of return. • Can pass the account to your heirs.

  11. Criticism of Republican plan • Privatization is subject to the financial markets. • Social Security is tied to inflation, it always pays more. • Privatization would be a financial boom for Wall St. • What happens to people who invest poorly?

  12. Democrat Proposals • Raise taxes • Cut benefits • Some combination of the two. • Example: cut benefits by 1%. Raise taxes 1%. Slowly raise the retirement age to 67.

  13. Degler Bernstein Doc. A because…

More Related