Chapter 9

Many argue that the future of Social Security is in jeopardy. Which of the following is NOT a reason to worry about the future of the program?

coverage of low income children

Social Security historically has included fairness in resource distribution by race and gender. (T/F)

false

Public assistance

government-funded effort to provide economic assistance to people who fall below a certain income level and are considered to be in poverty

federal insurance contributions act

mandates payment toward social security trust fund from wages

When the Social Security Act was passed in 1935, the public and legislators embraced which program?

none

The following programs were all part of the original Social Security Act of 1935:

old age insurance

old age insurance

part of new deal, now covers retirement coverage (OASDI)

New deal

policies of FDR following the great depression

Disability insurance was added in

1956

The tax rate for OASDI is

6.2%

From its introduction as a policy proposal, social security was widely embraced because of its support for the elderly & people with disabilities. (T/F)

False

The Social Security trust funds are projected to run out by 2019. (T/F)

False

The original Social Security Act of 1935 included Grants to States for Aid to Dependent Children and Medicare. (T/F)

False

Which of the following is true about privatization of Social Security?

Those who understand financial markets would do well

disability insurance

coverage for people who must stop working due to a disability

Regressive tax

a tax that is proportionately greater for people with low incomes than for people with higher incomes

Progressive tax

a tax that is proportionately higher for people with high incomes than for people with lower incomes

federal unemployment trust fund

all taxes collected from employment designated for unemployment insurance

Social insurance is

collectively funded program for workers and their dependents

Social insurance

collectively funded program for workers and their dependents that provides economic resources at the conclusion of employment due to retirement, disability or death

Reasons to worry:

ratio of current workers to retirees cost of benefits paid to retirees sufficient funds in trust trust investment strategies

progressive benefits

redistributes income from top to bottom

senior citizens freedom to work act

removed barriers so seniors could work without having social security benefits reduced

The overall intent of the Social Security Act was to create programs that would:

respond to immediate crisis while planning for long term security

The two key complementary components of the Social Security Act were:

social insurance and public assistance

Social Security is the main source of income for two-thirds of all elderly people. (T/F)

true

The full name of Social Security today is Old Age Survivors Disability Insurance. (T/F)

true

Today, social insurance programs include

unemployment insurance