The importance of the Social Security System lies with the fact that it primarily offers a program that would provide protection against poverty, old age, unemployment, and the likes. The idea of Social Security is similar, if not totally synonymous, to a social insurance wherein the individual equity (or contribution) is directly related to the benefit which the individual may receive.
On the other hand, social adequacy is more focused on the welfare aspect such that “if [it] were the sole objective, benefits might have been set at the same level for all workers, regardless of earnings and contribution levels, or might have been lower (or zero) for higher earners, or for those who had saved more for retirement, because they have lesser need” (American Academy of Actuaries, 2004, p. 2).
In this case, I believe that those who earn so much would benefit with the principle of equity, and it might be safe to suggest that only the wealthy people would benefit from this program. Following so, since most of us do not make much, the principle of equity may not be a good idea. On the other hand, I believe that the principle of adequacy could be helpful to those who do not make much money in the sense that they will be given equal privileges in the security program.
Yet, it is clear that in most Social Security Services, balance between the concepts of equity and adequacy is being maintained. If the Social Security System will be privatized, there might be a negative effect in terms of the balance between equity and adequacy. First, it would involve “shifting some of the money financing the current insurance program into investment accounts assigned to each worker” (Anrig & Wasow, 2005, p. 4), thus creating a threat to families’ insurances.
Moreover, “a much larger share of today's workers would confront large benefit cuts, or tax increases, than if no changes were made” (Anrig & Wasow, 2005, p. 6) There is no guarantee that we will able to receive Social Security as part of retirement benefits in the future. There seems to be an uncompromising situation, considering that we are just at the beginning of the economic crisis, and I think it would definitely add to the current negative economic stature of most people in the country.
References American Academy of Actuaries. (2004, January). Social Adequacy and Individual Equity in Social Security. Retrieved March 16, 2009, from http://www. actuary. org/pdf/socialsecurity/individual_jan04. pdf. Anrig, Jr. , G.. , Wasow, B. (2005, February 14). TCF Brief Issue: Twelve Reasons Why Privatizing Social Security is a Bad Idea. New York: The Century Foundation. Retrieved March 16, 2009, from http://www. tcf. org/Publications/RetirementSecurity/12badideas. pdf.