Final Review Sheet Completed

Final Review Sheet Completed - Benbow 1 Final Exam Review...

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Benbow 1 Final Exam Review Sheet Government 310L Professor Andrew Karch Key Terms *Social Security: the origins lay in the Great Depression when poverty among the elderly was extremely bad. The main objective was to establish an alternative that was long lasting and permanent. They wanted to provide economics security for all people, but the mainly the elderly. In the beginning the cost was minimal. It only covered certain people and jobs, early beneficiaries has “paid in” for a limited number of years, less generous benefits, lower life expectancy, and significantly fewer recipients. This kept the cost low, but the cost has gradually risen over the last several decades. Broad expansion came in the form of the following: 1965: the creation of MEDICARE—this provided S.S. recipients with a broad range of medical benefits 1972: benefits INDEXED to inflation—this allowed for automatic increases when price levels rise. This was mainly a tactic for election. 1972 was an election year and it was a way to give “goodies” to the elderly (a large voting block). The benefits are paid based on the contributions the individual has made to the program. For the most part, the amount of benefits paid out exceeds that amount that a person pays into the system. This is mainly because the force contributing to the fund now (the ones that are paying for them) is greater and the retiree population that they had to pay for was smaller. This trend is changing though as the baby boomer generation is starting to retire and the population entering the workforce is smaller due to a declining birth rate. This program has been extremely politically popular though. This is in part due to three things: 1. structure: the current structure means that it benefits everyone, regardless of income, health status, etc. so long as you meet the age requirements and have paid into the system. It is viewed as an equal opportunity program. 2. Its success: the program, unlike many other government programs, has been successful as reducing the amount of elderly poverty. 3. Slow expansion: its incremental expansion over time has allowed the program to grow without overloading the public. This bit-by-bit expansion has allowed it to grow without making people turn on it. The program is able to spread the cost over many income ranges and deliver benefits across all classes. The rich support the program in reality, but they are still benefiting from the program. Without them, it is thought that the system would fall apart. Some say that the program benefits people who do not need it (such as the rich) though. Possible solutions include: 1. Payroll tax increase—a slight increase would help alleviate the stain 2. Increase in retirement age—a gradual increase in the retirement age would also help defray the cost of the program. 3.
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Final Review Sheet Completed - Benbow 1 Final Exam Review...

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