Social Security Essay
Economic Impacts of Social Security
Social policies that are regulated by the government are crucial programs that concern millions of people in the country (Bresiger, 2019). This essay is going to focus on the United States. For instance, the social security program comes to nearly 60 million people's rescue in the United States, but it has some economic consequences to the State, of course.The social security program in the United States has been seen as a savior to the citizens aged 65 and older by many. But the program does not benefit only the retired citizens but the ones who lost their wages or incomes due to disability or death. Benefits of Social Security shut nearly 22 million citizens off the poverty line, and this number does not include only the old citizens but the citizens of all ages (Press, 2017). But the benefits of Social Security in the country are not limited to this. It also provides 9.2 millions of jobs all over the country and nearly 1.5 trillion dollars of economic output (Bresiger, 2019). But it also puts economic burdens on the government, for instance in the times of economic crisis. For instance, during the global economic crisis in 2008, the economic gap of Social Security was largely questioned in the country.
Some of the critics offered reform plans, which include reducing benefits and increasing revenue while some offered only reducing benefits in order to catch up the economic gap claiming to increase the payroll tax only harms both the society and the economy at large. One view was that reducing the benefits or reforming Social Security would have no impact on the economy. But Social Security supports both the economy of the State and the individuals. When the people who benefit from Social Security buy goods or any other products, the incomes of the companies and the firms which supply those companies increase and in turn, this situation ends in more job opportunities and employment rate.
Social Security service plays a crucial role in family income. For instance, when thinking about medical care in the United States, the disabled or retired citizens need this service in order to get proper medical care. Because the medical care service in the United States is not free. The economic effects of Social Security benefits on the United States economy and economies of the individuals begin with the payments. For instance, Social Security paid out approximately 792 billion dollars to the citizens of the United States in 2012. Also, the beneficiaries do not keep the money inside. They spend the money provided by Social Security in various fields like food, furniture, and medical care. It allows companies to grow, and this situation creates more employment opportunities. So when we think it as a chain of benefits, Social Security service contributes to increasing the employment rate, and a high employment rate is crucial for the welfare of the community.
The tendency to spend the money from the total income is known as the marginal propensity to consume (MPC). If the average MPC is high, the economic impact will be bigger because more dollars will circulate in the economy. The citizens who benefit from Social Security service are relatively the poor. Lower-income households spend a higher proportion of their income, and they mostly spend the money on necessities, and this causes various economic impacts on different sectors of the economy. For instance, the companies selling cheaper products can still be alive, thanks to lower-income households.
Social Security Essay: Conclusion
After all, social Security service has more advantages than its disadvantages. It allows for a higher employment rate and higher welfare in the community. Its disadvantages were highly questioned only in the Great Recession in 2008. From its foundation, millions of people in the United States have benefited from the service until now. It contributes to the economy of both the country and the community.
Bresiger, G. (2019, December 1). Social Security is reaching a point of no return. https://nypost.com/2019/12/01/social-security-is-reaching-a-point-of-no-return/.
Press, A. (2017, October 13). Social Security benefits going up by 2 percent in 2018. New York Post. https://nypost.com/2017/10/13/social-security-benefits-going-up-by-2-percent-in-2018/.
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