Theintroduction of an Act increases the government’s spending to caterfor its implementation. The bills introduced in any state are meantto improve the economic status as well as the social status ofpeople. Social security is one of the most expensive programs thatthe government pursues (Bandura,& Kaul, 2006).A small federal government with limited sources of revenue may findit difficult to introduce the program. Alternatively, the state cancharge additional taxes to provide such services to the citizens.Also, the government may reduce expenditure in other sectors of theeconomy to concentrate on financing the program (Bandura,& Kaul, 2006).
Inthe past, before introduction of in the UnitedStates, the citizens used to save money on for emergencies. They usedto do savings in the existing financial institutions and anotherplace they deemed safe. However, the introduction of this Acteliminated this old method of saving (Worth,2011). As they saved, more money was available in state’s financialmarkets whereby the firms would borrow. The approach leads to lots ofinvestments as well as build up of the capital stock of the economy.
However,all this would be eliminated through the introduction of SocialSecurity Act which would deny the people a chance to save. Reducedsavings increases the chances of an economy becoming poor due toinadequate investments. The rationale for this is the fundscollected by the government from the people would not be used forcapital investment but rather set aside to pay people when they getold (Worth,2011).
SocialSecurity program, like any other government initiative, requiresfunding. It costs about one percent of benefits issued to administerthe system which turns out to be its direct cost. In certaincircumstances where people are requested to pay higher taxes,citizens are likely to be disgruntled (Holmqvist,2012).
Peoplewould be less willing to work since the state deducts more from theirsalaries to fund the introduced of the program. It is also worthnoting that taxes reduce the relative funds set aside for leisure.Implementation of the would incur additionalexpenses, and this may arguably distort their choices which wouldsubsequently lead to the poor execution of state duties (Holmqvist,2012).
Onthe other hand, the initiative may prove beneficial to the economy inthat it would keep them out of poverty while at their old age. Ifpeople remain energetic, then they would be able to work towardsimproving the economy. Through the plan, the government canconcentrate on other sectors of the economy (Worth,2011).The institutions would not dwell so much on the welfare of the seniorcitizens but put more effort on other sectors that support theeconomy. Through the scheme, the government would also help peopleconcentrate on their current life without worrying about their laterlives. This would help them provide proper services to in theiroccupations hence improving the economy of the state (Worth,2011).
TheSocial Security scheme should not be introduced in a government thathas a restricted source of revenue since it would strain its budget.The idea of state depriving funds to other sectors would cause animbalance in the economy. For the implementation of this idea by thestate to be ideal, it has to be transformed into a fully-funded aSocial Security scheme. Additionally, from the above discussion, itis possible for people to make decisions and plan for their future.
Bandura,R., & Kaul, I. (2006). Financing Social Protection. Global SocialPolicy, 6(1), 109-112.
Cichon,M. (2004). Financingsocial protection.Geneva: Internat. Labour Office.
Holmqvist,G. (2012). External Financing of Social Protection: Opportunities and
Risks.Development Policy Review, 30(1), 5-27.doi:10.1111/j.1467-7679.2012.00557.x
Worth,R. (2011). SocialSecurity Act.New York: Marshall Cavendish Benchmark.