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the security council Social Security

Social Security is a hot topic of debate today, since most American's believe
that the system is near collapse. The trust fund that Americans have been paying
into for Social Security is likely to dry up in 2029 due to the large number of
baby boomers heading into retirement. Franklin Roosevelt set up Social security
to help the people that had worked and Struggled all their lives in honest toil.
Social security was set up to accomplish two main goals. The first goal of
Social Security is to act as a disability or life insurance policy that protects
almost all Americans. Currently, there are seven million survivors of deceased
workers and four million disabled Americans that receive income support from
Social Security. The second goal is to provide lifetime retirement benefits that
rise with inflation. Social Security payments for retirees are needed to keep
half of the elderly Americans above the poverty line. A large number of baby
boomers believe that they won't see a dime's worth of Social Security benefits,
and most younger people assume that once they have reached retirement the
program will be gone. There have been many proposed solutions to the Social
Security problem. A first possible solution is to dramatically change the Social
Security Payroll Tax. Another proposal is to change amount of benefits of the
provided by Social Security. A third reform proposal includes investing Social
Security money in stocks either by the government investing the money or by
setting up mandatory IRA investing. Another major development in the future of
Social Security is the recent proposals made by President Clinton's Advisory
Committee on Social Security. In January of this year the Advisory Committee on
Social Security presented a report of strategies to save Social Security.
Shortly after the 261 page report was released there was a huge increase of
debates and criticism over the future of Social Security. The issue facing
American today is when and how to reform Social Security. Although the American
public and political groups are unwilling to accept the burdens of social
security reform, extensive reform is needed soon to continue paying the current
benefits to American citizens. A change in the Social Security tax is a possible
factor of reform to bring the Social Security program back on track. Currently
the Social Security tax is a flat-rate tax paid on all employment earnings up to
a specified limit. Due to inflation the limit is increased every year currently
it is just over $60,000. This tax is much harder on a lower income individual
because the higher income individual is only taxed on their income that is below
a certain amount set every year. It has been proposed that if the limit on the
payroll tax were lifted, two-thirds of the projected Social Security deficit
would be eliminated. Once the limit on the payroll tax is lifted a rise in the
tax rate of the employers and the employees by 1.1% is predicted to be enough to
solve Social Security's problems. This is assuming that two evasive actions take
place. First the government will have to keep its hands of this extra tax
revenue gained by the tax increases. Second the proposed solution will only have
a chance to work if it is started immediately while the baby boomers are still
able to add a little more cash to the trust fund for there own retirement. This
solution isn't likely to be implemented by today's political system. The
advisory council on Social Security would not pursue the lift of the limit
because the support of the wealthy voters for Social Security reform would be
lost. Americans are also weary of Social Security tax increases. The middle and
lower class voters would also not support a Social Security tax increase. A
recent poll by Money magazine found that 70% of the public is unwilling to pay
more tax than the current 6.2% rate. Another proposed solution to Social
Security's problems is a to decrease the amount of benefits received by
retirees. The first way to reduce the amount of benefits that are being paid out
is to adjust the CPI. Sen. Daniel Monynihan of New York (Dem.) has proposed that
a 1.1% cut in annual cost-of-living adjustments for pensioners would be a
reasonable solution to Social Securities problems. The adjustment of the CPI
would reflect the belief by many economists that the CPI overstates current
inflation. He claims that this would almost completely solve the problems in the
Social Security program by insuring that the expected inflow ... more

the security council

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Economics in Asia




PG 109:Global Perspectives on Development
Pacific Asia’s Changing Fortunes in the Global Economy since 1970
Since the mid 1960s, Pacific Asia has had a remarkable rate of economic growth. This growth has been sustainable and faster than all other regions of the world (see fig. 1). This region consists of  twenty-three economies but it was just eight who caused most of this amazing growth. The eight were Hong Kong, the Republic of Korea, Singapore, Taiwan, China, (the “Four Tigers”) Japan and the newly industrialised economies (NIEs) of south-east Asia, Indonesia, Malaysia, and Thailand. The eight high performing Asian economies (HPAEs) mentioned here will be the focus of this essay.  What caused this success in Pacific Asia? What role did public policies play in engineering this rapid growth? How was the human and physical capital accumulated?
Most of the high growth in the HPAEs was achieved by getting the basics right. Large human capital and private domestic investment largely powered the growth. High domestic savings levels meant HPAE investment levels remained high. Agriculture experienced rapid growth and improvement of its productivity. HPAEs population growth rate declined faster than in other parts of the developing world. HPAEs were also helped by their labour force being better-educated and having more effective public administration than other developing regions. Another cause of this success, was the development policy used. The policies were made to create a stable framework for private investment while increasing the integrity of the banking system, raising levels of financial savings. Education policies concentrated on primary and secondary schools to create a labour force with better skills. Policies on agriculture pushed productivity without pushing the rural economy. Government intervention was also essential to foster development.
The growth of these HPAEs is highly unusual in the developing world. They are highly diverse in culture, resources and population yet they are banded together with some characteristics. They have all had rapid sustained growth with highly equal income distributions. Strong agriculture, rapid demographic changes and export booms.
There are two main views of how the HPAEs were so successful. The first is the neo-classical, which stresses getting the basics right. This was providing a strong legal framework to promote competition (domestic and international), the absence of price distortions (e g price controls) and the investment in people, health and education. The second view is of the revisionist, where the government uses state-led development and intervention to achieve growth.
The macroeconomic policies of the HPAEs were very responsible. They were able to limit fiscal deficits to levels that could be financed without the pressures of inflation increasing. Inflation was moderate and predictable, enabling interest rates to be very stable. The stability of the macroeconomic environment made long-term planning and private investment possible. HPAEs adjusted to terms of trade shocks more effectively than other developing economies and have had more robust recoveries of financial investment. Export growth grew thanks to exchange rate protection (Japan, Taiwan and China) and exchange rate adjustments. Import substitution (non macroeconomic) and pro export structures were established.
Leaders of HPAEs tried to build an institutional basis for growth. They put forward ideas of shared growth, where everyone benefits from economic groups. Korea and China carried out land reforms while Indonesia used rice and fertiliser policies to raise rural incomes, this was to prove the shared wealth. HPAEs tried to build business-friendly environments by setting up deliberation councils to shape government policy towards business. Private sector companies drafted the rules and so became more willing participants.
The building of human capital was essential to the HPAEs growth. Spending was first concentrated on providing primary education for all. Universal secondly education was introduced later on. Birth rates fell, so when spending remained constant, more resources were available per child. Further education concentrated on skills (mainly technical) and imported educational services for most of this teaching. These improvements resulted in a technologically inclined human capital base from which they could engage the rapid growth of the economy.
The HPAEs increased the levels of savings and investments by avoiding inflation and keeping interest rates on deposits stable and positive. On the whole HPAEs had higher real interest rates on deposits than other low and middle-income developing economies. Banks were given higher security ... more

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