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Why We Need Social Security
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Paul Starr,
The American Prospect,
2/1/2005
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Paul Starr writes in a special issue of The American Prospect cosponsored by The Century Foundation and the Economic Policy Institute: "Superficially, Social Security resembles traditional employer pensions: Americans pay into the system during their working years and receive a monthly pension during retirement. But the differences are fundamental. Social Security benefits are based on a balancing of two principles: equity and adequacy. Equity means that what you put in is related to what you get out; in other words, workers with higher wages, who pay more into the system, receive higher benefits later on. But under the principle of adequacy, the Social Security benefit formula overlooks years of low earnings (for example, when a worker may have been disabled or unemployed), and it replaces a higher proportion of earnings for the poor than for the rich. That’s why it’s our most successful anti-poverty program. In addition, Social Security benefits are indexed against inflation and protected from the ups and downs of the economy and financial markets. That’s why the program provides security for the middle class."
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