Social Security Has Long Been A Topic Of Heated Debate

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Term Paper Title	Social Security Has Long Been A Topic Of Heated Debate
# of Words	776
# of Pages (250 words per page double spaced)	3.1

     Social Security has long been a topic of heated debate
for the people of the United States-from small, low income
families even to the most educated Harvard graduates. The
reason that Social Security is such a popular argument is
because it affects everyone.  This is an extremely situation
because it has a lot of problems that need to be worked out
before it’s too late. For example, the way it is financed,
the burden of its taxes and the damage it does to the
national savings and investment.
     The problem with the way it’s financed is the fact that
the taxpayer isn’t getting returned as much as he should,
and the fact that the money isn’t being invested as it has
the ability to be. Because of this simple fact, Social
Security becomes a noose on the American economy, choking
financial assets from being invested in a useful manner. If
we could just find a way to change Social Security so that
the money was used wisely, our economy could be helped out
immensely.
     According to Harvard economist Martin Feldstein, the
revenue collected from Social Security would add 3% to the
nation’s total output of goods and services per year, and it
would just be from collecting the people’s money and
investing it in a manner that will not only serve it’s
original purpose, but also be beneficial to the taxpayers
themselves. If 3% doesn’t look like a lot, consider the fact
that it’s about a third more than the total budget deficit,
and that most of it is in governmental IOUs and not
investments like stocks and bonds. In 1995, this percent
would have produced approximately $220 billion dollars.
     Another problem is the burden of the taxes. According
to Fortune magazine reporter Rob Norton, almost all taxes
distort the economy, which are a burden to the taxpayers,
but don’t even produce additional revenue for the
government.  Also, the money that the taxpayers earn on
their mandatory Social Security contributions is a lot less
than they could earn in a private pension or in a funded
system.
     Feldstein argues that “Social Security contributions
can be expected to grow at the same low rate at which the
payroll-tax base has been growing: 2.6%, on average since
1960. The real pretax return on non-financial corporate
capital was 9.3% over the same period.” This information,
granted the 6.7 percentage point difference, shows that the
loss is quite significant.
     Because of this result, distortions in labor supply
wil...

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