Essay on Economics The American Government

Economics The American Government Term Papers

While the free essays can give you inspiration for writing, they cannot be used 'as is' because they will not meet your assignment's requirements. If you are in a time crunch, then you need a custom written term paper on your subject (economics the american government)
Here you can hire an independent writer/researcher to custom write you an authentic essay to your specifications that will pass any plagiarism test (e.g. Turnitin). Waste no more time!

Economics: The American Government

Most of the problems of the United states are related to the economy. One of the

major issues facing the country today is social security.

The United States was one of the last major industrialized nations to establish

a social security system. In 1911, Wisconsin passed the first state workers

compensation law to be held constitutional. At that time, most Americans

believed the government should not have to care for the aged, disabled or needy.

But such attitudes changed during the Great Depression in the 1930's.

In 1935, Congress passed the Social Security Act. This law became the basis of

the U.S. social insurance system. It provided cash benefits to only retired

workers in commerce or industry. In 1939, Congress amended the act to benefit

and dependent children of retired workers and widows and children of deceased

workers . In 1950, the act began to cover many farm and domestic workers, non

professional self employed workers, and many state and municipal employees.

Coverage became nearly universal in 1956, when lawyers and other professional

workers came under the system.

Social security is a government program that helps workers and retired workers

and their families achieve a degree of economic security. Social security also

called social insurance (Robertson p. 33), provides cash payments to help

replace income lost as a result of retirement, unemployment, disability, or

death. The program also helps pay the cost of medical care for people age 65 or

older and for some disabled workers. About one-sixth of the people in the United

States receive social security benefits.

People become eligible to receive benefits by working in a certain period in a

job covered by social security. Employers and workers finance the program

through payroll taxes. Participation in the social security system is required

for about 95 percent of all U.S. workers. Social security differs from public

assistance. Social security pays benefits to individuals, and their families,

largely on the basis of work histories. Public assistance, or welfare, aids the

needy, regardless of their work records. All industrialized countries as well as

many developing nations have a social security system. The social security

program in the United states has three main parts. They are (1) old-aged,

survivors, disability, and hospital insurance (OASDHI), (2) unemployment

insurance; and (3) workers' compensation.

THE SOCIAL SECURITY PAYROLL TAX

This tax was to be taken from the payrolls of the nation's employers and

employees. The government felt that, like unemployment benefits, the social

security should be financed by those who got the greatest benefit, those who

worked, and were liable to need those benefits in the future.

A plan that would affect those only who had paid such a tax for a number of

years would have done those who were currently suffering under the Depression no

good at all. As a result, the social security plan began paying out benefits

almost immediately to those who had been retired, or elderly and out of work,

and who were unable, primarily because of the depressed economic conditions, to

retire comfortably. In this way, the government was able to accomplish two

objectives: first, it helped the economy pull out of the depression, by

providing a means by which old people could support themselves and, by buying

goods and services, support others in the community ; and second, it showed the

younger workers of that time that they no longer had to fear living out their

retirement years in fear of poverty.

Therefore, the social security payroll tax has been used to provide benefits to

those who otherwise would have little means of support, and as of this writing,

there has never been a year when Social Security benefits were not paid due to

lack of Social Security income. (Boskin p.122) PAYING

OUT BENEFITS Social

Security benefits increased 142% in the period between 1950-1972. not only the

elderly, but many of the survivers, the widows and children, of those who paid

into the Social Security system, have received social security checks. These

checks have paid for the food shelters, and in many instances the college

education of the recipients.

Unlike private insurance firms, the United States Government does not have to

worry about financial failure. Government bonds are considered the safest

investment money can buy-so safe, they are considered "risk free" by many

financial scholars. (Stein p. 198) The ability of the United States Government

to raise money to meet the requirements of the social security should be no more

in doubt than the governments ability to finance the national defense, the

housing programs, the State Department, or any of the other activities that the

federal government gets involved in.

By paying out benefits equally to all participate in Social Security- that is by

not relying so heavily on total payments in making the decision to pay out

benefits, the system is able to pay benefits to people who otherwise may not be

able to afford an insurance program that would provide them with as much

protection. One of the main reasons for the government's involvement in this

program, is its ability and its desire to provide insurance benefits for the

poor and widowed, who under the private market, might not be able to acquire the

insurance to continue on a financially steady course.

The government, then, is in a totally unique position to pay out benefits that

would be out of the reach of many American families. Another great advantage of

this system, is the ability of the government to adjust the benefits for the

effects of inflation(Robertson p.134)

INFLATION AND SOCIAL SECURITY

Private insurance plans are totally unable to adjust for the effects of

inflation with complete accuracy. In order for an insurance company to make this

adjustment, they would have to be able to see forty-five years into the future,

with twenty-twenty vision. When a private pension plan currently insures the

twenty-year-old worker, it can only guarantee a fixed income when the worker

reaches sixty-five and a fixed income is a prime victim of inflation (Robertson

p.332) In order to adjust for that inflation, the private insurance firm would

have to be able to predict what the inflation rate will be from the moment the

worker is insured until the day he dies, and then make the complex adjustments

necessary to reflect this in the pension plan. An inflation estimate that is too

small will result in the erosion of the workers retirement benefits.

Because the government, unlike the private insurance firm, can guarantee that...

You should cite this paper as follows:

MLA Style
. EssayMania.com. Retrieved on 12 Feb, 2012 from
    <http://essaymania.com/40288/economics-the-american-government>

More College Papers

America Online To Unveil Flat Fee For Internet Access
America Online To Unveil Flat Fee For Internet Access The Internet is becoming more popular and more widely used, and the Market for internet access is growing rapidly. To stay competitive in this fast-moving industry, America Online has announced that they will switch their price plan

Frank Lincoln Wright
Frank Lincoln Wright ".......having a good start not only do I fully intend to be the greatest architect who has yet lived, but fully intend to be the greatest architect who will ever live. Yes, I intend to be the greatest architect of all time." - Frank Lloyd Wright 1867-1959 CHILDHO

Affirmative Action
Affirmative Action The term affirmative action is applied to the use of racial, ethnic, or gendr prefrences set apart a variety of social benefits. The groups receiving such benifits, such as blacks, indians, and women are assumed to havee been victims of descrimination in the past. Thus, a pr