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Critique of the Social Security Act

Outline
1. Introduction
a. Background
b. Thesis statement
2. Negative impacts of social security act
3. How can we solve these problems?
4. Conclusion
 
Critique of the Social Security Act
Introduction
Since 1970s, most industrialized nations have enacted social security legislations to enhance government funding of such programs (Abel-Smith & Maynard, 2009). In fact, most European nations have taken the lead in establishing and implementing social security acts within their jurisdictions. However, for the United States to copy this lesson from Europe and other areas, it is necessary to consider the foreseen and expected impacts of such legislation on the society and the economy. Arguably, social security act empowers people with rights to benefits, which reduce their economic productivity, increase in wage demands and high levels of voluntary and involuntary unemployment. Therefore, social security act will be responsible for a reduced economic growth.

The negative impacts of social security

Social security funding is likely to produce negative impacts on the national economy in three major forms. First, social security act will provide social security funding to the unemployed and employed alike. The unemployed people will benefit from social security funding, yet they do not contribute to its creation. In this way, the resulting society will be divided into two groups- the working group that provides social security funding to the whole population and the non-working group that benefits from the working group. In this kind of society, high levels of unemployed benefits will create laziness among the people. There will be a reduction of incentives to take employment and paid work because people are assured of social security regardless of whether they work or not (Bellevue University, 2011).
Secondly, taxation system will be affected. In fact, social security benefits will entice people to resist paying taxes. It has been shown that evasion of and resistance to taxation is common in socialist societies because they feel that after all, they are assured of social security funding (Wilensky, 2005). The result will be that the rate of wage demands, government deficits and inflations will increase rapidly. In this kind of society, economic crises and reduced industrial growth are common phenomena. A government that cannot collect enough taxes cannot meet the demands of its population.
Thirdly, a Social Security Act will benefit the people with the rights to a benefit, which is likely to reduce their ability and willingness to save. In fact, most people in nations that have weak social security funding are forced to save as much as possible. A society that does not have a saving culture is less likely to experience social and economic growth (Wilensky, 2005). In fact, the rate of investment and economic growth will reduce because people will be spending on unnecessary things, yet they are lazy and resistant to pay tax.

How can we cope with these problems?

To cope with these problems, it is necessary to ensure that the proposed Social Security Act is different from the current examples. For instance, it is necessary to provide social insurance benefits to the population, but replace it with a negative income tax. Economic growth ensures that people are working and investing, which will give them the ability to take out private insurance against all those risks that social security funding would otherwise provide. It is important that the new legislation consider enticing people to take paid work in order to ensure that they take up private insurance.

Conclusion
The Act should only offer social security benefits to a small portion of the population, especially the people with disabilities and other minority groups. In this way, the society will increase its economic productivity while still catering for the less fortunate people.
 
References
Abel-Smith, B., & Maynard, A. (2009). The Organization, Financing, and Cost of Health Care in The European Community. Mason, OH: Cengage Learning.
Bellevue University. (2011). Kirkpatrick signature series book 4. Bellevue, NE: Bellevue university.
Wilensky, H. L. (2005). Comparative social policy: theories, methods, findings. University of California, CA: Institute of International Studies

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