American Economics

9 Pages 2164 Words

iffers 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 support themselves and, by buying goods and
services, support others in the community ; and second, it showed the
younger workers of that time that they no longer had to fear living out
their retirement years in fear of poverty.
Therefore, the social security payroll tax has been used to provide
benefits to those who otherwise would have little means of support, and
as of this writing, there has never been a year when Social Security
benefits were not paid due to lack of Social Se...