In August 1935, President Franklin Delano Roosevelt signed into law a remarkable piece of legislation. The bill was called the Social Security Act and it made history. Over the years, the Social Security program has gone through many changes to arrive at its current status, yet although the program has saved millions of America's retirees from falling into poverty, there have been some significant, and still unresolved, flaws in the system.
Many people do not know that Social Security runs on a pay-as-you-go system. This means that the portion of a worker's paycheck that is deposited into the system does not accumulate in an account and get returned to the worker when he or she retires, but instead, is used in combination with the contributions of other workers to pay for the benefits of America's currently retired and disabled citizens. Over the past several years many have come to question whether or not this system will remain effective knowing that the 80 million strong Baby Boom generation has begun to retire whose members must be supported by the contributions of the much smaller current working generation. According to the Pew Research Center, approximately 10,000 Baby Boomers in 2011 reach retirement age each day. Based on these statistics, one might wonder why the contributions of all workers are placed into a single account in the U.S. Treasury. If every single worker had his or her own separate account in which their Social Security contributions accumulated, workers would gain control over this money and use it to support themselves in retirement. It is for these reasons that to keep hard-earned benefits from becoming lost and to cure Social Security of its massive debt, privatization is the best step to take for repair of the system.
When Social Security was in its infancy, the contributions of 17 workers paid for the benefits of one retiree. By the end of World War II there was a massive increase in the number of children born.
