A report on American economics
A report on American economicsMost 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...
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