Social Security: Why You Should Care

In the 1930s under the direction of President Franklin D. Roosevelt, the Social Security system was set up as a program to assist those unable to pay for retirement. The program developed as a way for one generation to pay for the retiring generation in the hope that future generations would compensate them during their own retirement.

Currently, many predict an impending Social Security crisis that has become a central issue in politics. One important factor is the imbalanced ratio of the working generation to the retiring generation. In its development during the 1950’s the Social Security system had a worker-retiree ratio of 16:1. This ratio is currently around 3:1. With baby boomers beginning to retire in 2008 as well as increased life expectancy, this ratio is only expected to drop.

According to Dr. Dezhbakhsh, acting chair- man and director of undergraduate studies in economics, another factor that has played an important role in this impending crisis is the “financial irresponsibility of legislators.” While the Social Security system continues to run a surplus, this surplus has been spent by the government for “causes unrelated to social security.”

In an effort to solve these problems the Bush administration has proposed privatizing the Social Security System. This would allow people to put a portion of their social security tax into stock and bond portfolios in the hope of a higher rate of return. While this takes away from government revenue in the short run, this will reduce government obligation in the long run.

These plans to privatize Social Security pose serious consequences to college students. Upon graduation, students will enter the work force and will be the first to pay into this privatized system. In a sense, we will be testing out this new system. Furthermore, college graduates will be responsible for paying for the retirement of a large number of retiring baby boomers. This poses a heavy burden onto these newly graduated workers who will be greatly outnumbered by the retirees. Additionally, the huge transitional costs privatization would impose in the economy will prove to make the burden of college graduates working for private companies even heavier.

As such, personal responsibility will play a key role in one’s financial stability after retirement. It is thus imperative that young adults working their way into the work world become aware of the reality of the Social Security System and take an active role in their own lives by voicing their opinions.