Essay 15

2006-2 In recent decades, entitlement programs have constituted a substantial portion of the United States federal budget. Social Security is the largest entitlement program in the US. From the information in the chart above, and your knowledge of the US government and politics, perform the following tasks.

(a) define entitlement program
An entitlement program is a kind of government program that provides individuals with personal financial benefits (or sometimes special government-provided goods or services) to which an indefinite (but usually rather large) number of potential beneficiaries have a legal right (enforceable in court, if necessary) whenever they meet eligibility conditions that are specified by the standard law that authorizes the program. 

(b) What is the primary source of revenue for the Social Security program:
The primary source of revenue for the Social Security Program is payroll deductions. 

(c) Identify one threat to the future of the Social security program should the trends depicted in the chart continue:
One threat to the future of the Social Security Program should the tends continue would be that the amount of retirees will soon overtax the workers. Because of the baby boomers, there was a higher worker to collector ratio. Right now there is 50 workers for every collector while soon there will be only 3 worker for every collector. Workers will either be over taxed or the retirees will have lower funds. 

(d) Describe one demographic trend that threatens the future of the Social Security program and explain how it is responsible for the threat that you identified in (c )
One demographic trend that threatens the future of the Social Security program is a declining birth rate. The baby boomers raised the population. Todays social security program is based around this larger population. As the baby boomers grow old and die off the population will decrease and it will affect how the Social Security program works. We now have 50 workers for 1 collector but as our population decreases we will soon have 3 workers for 1 collector which means that retirees will not be able to collect as much as they once did. Americans are also living longer which means that people are going to be collecting social security for a lot longer. 

(e) Explain how any one of the trends in the chart above would change if the age of eligibility for social security were raised. 
If the age of eligibility for social security were raised it would mean that people would pay taxes for a longer period of time and as an individual would get more money for social security. You would pay more for taxes which would mean collecting more after retirement. This would also help the issues caused by the baby boomers and the fact that americans, on average, are beginning to live longer.