Social

Security &
Its’
Challenges
AUTUMN HEPLER

SEC 102 45 MACROECONOMICS

 Table of contents
I. The Path To Assistance (slides 3-4)

II. What Is Social Security? (slide 5-6)

III. Challenges (slides 7-9)

IV. Conclusion and Recommendations (slides 10-11)

V. References(slide 12)
Laissez faire: A French phrase for “leave it alone”.
 The Path To Assistance
Laissez-Faire
Before Social Security, classical economists
believed that the economy would recover on
its own without government intervention.
Nobody anticipated an economic recession
that we now know as the Great Depression.
Economic downturns were said to be only
temporary, not permanent thus no need for
any assistance.
I Want To Retire!
Prior to Social Security, if someone wanted
to retire, they had to find a way to save on
their own. Very few companies offered a
pension plan and even when it was offered,
not many individuals qualified for it. In the
1930s, half of Americans did not have the
financial means to take care of themselves.
Recognition For Change
Franklin D. Roosevelt recognized that at
least one-third of Americans were lacking
food, clothing, and housing. This eventually
lead him on the path to sign for Social
Security.
 What Is Social Security?
On August 15th, 1935 President Franklin D. Roosevelt signed and the Social Security Act
officially became a law.

 The Social Security System is “a system of federally funded services and payments to
help support the needy, the aged, and the temporarily unemployed as well as providing
support for needy, dependent, disabled, or neglected children, rehabilitation for the
disabled, and a host of other social services.” (
Social security system Definition & Meaning | Dictionary.com)
 What Purpose Does It Serve?
 The Social Security Act’s primary purposes are:
 To protect the elderly and disabled financially
 To provide the material needs of individuals/families
 To provide opportunity for kids to have stability
 To help families remain together
 Challenges
Social Secu-
rity as income Life Expectancy
2022
2000
1975
1950
62 64 66 68 70 72 74 76 78 80
Life Expectancy

Source:
Unemployment during the great depression - Economics Hel
Retirees using SS for its p
intended purpose of 40%
or less of their income Source: Social Security Administration (
81 Years of Social Security's Maximum Taxable Earnings in 1 Chart | The Motley Fool)
Retired population with
insufficiently planned
funds

Source:Full Source: Board of Trustees (2019), Table V.C5 and Figures V.C3 and V.C6. (

Source: Schiller, 2016, p. 163 Retirement Age for Getting Social Security | The Motley Fool Trends in Social Security Disability Insurance (ssa.gov))
 Remaining Workforce

Baby Boomers
Retiring

Worker-to-beneficiary ratio
 Historical Unemployment Highs
Milestone
Unemployment rates
reached 24.9% due to
the Great Depression

Milestone
Milestone Unemployment rates Milestone Today
Unemployment rates jumped to 10.8% during The Great Recession
hit a high of 9% the Energy Crisis occurred, and the The COVID-19
during the Oil Recession unemployment rate hit pandemic came
Embargo Recession 10% crashing in causing
unemployment rates
to reach 14.7%

01 02 03 04

1929 -1933 1973 1981 - 1982 2007 - 2009 2020 – Present

1929 1960 2000 2022

 Conclusion
We can draw the conclusion
that there are many factors
contributing to the
Social Worker-to- depletion of Social Security
Security beneficiary funds for future
generations. The number
Problems ratio one reason why we can
expect to have a significant
cut in Social Security funds
is primarily due to the
large number of Baby
Boomers retiring and not
enough people in the
workforce to supplement
that income.
 Recommendations
The cap on the taxable income needs to be increased for the current workforce and this
adjustment will help close the gap. If the tax limit was eliminated altogether, workers with
higher incomes could help supplement the soon to be deficit. The trouble is this needs to be
done soon or we may not recover in time for the next generation to retire and still manage to
receive adequate Social Security benefits. Society may not agree that this is a fair approach
as those who earn a higher wage will be the ones paying the most, however, this group will
lose out with everyone else if the Social Security benefit has a cutback of 20 + % as
anticipated. The reality is that no matter how this is approached the future generations of
Gen-X and millennials will ultimately have to pay the price one way or another to find stable
ground once again.
• Schiller, B. R. (2016). The Economy Today (14th ed.). New York, U.S.: McGraw-Hill
Education
• Full Retirement Age for Getting Social Security | The Motley Fool
• Unemployment during the great depression - Economics Help
• 81 Years of Social Security's Maximum Taxable Earnings in 1 Chart | The Motley Fool
• Trends in Social Security Disability Insurance (ssa.gov)