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QOTD #15 According to those in favour of privatisation of Social Secur

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QOTD #15 According to those in favour of privatisation of Social Secur [#permalink]

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According to those in favour of privatisation of Social Security in the US, the current system is impossible to sustain. Decades ago, there were many more workers for every recipient but now the situation has reversed. Sooner or later, the fund will not be able to meet its obligations, because there will be more payments going out, than income coming in. Privatizing the system for the future recipients, while gradually phasing out the system for current and near-term recipients, is probably the best way to keep the system viable.

The answer to which of the following questions would be most useful in determining whether privatization of Social Security in the US would be a good idea?

(A) Whether privatization has proved successful for other government provided services such as employee provident funds
(B) Whether the population of the US is likely to increase significantly in the future
(C) Whether the growth in the number of workers is the US is likely to outstrip the growth in the number of dependents in the future
(D) Whether privatization of social security will lead to large scale protests by US citizens
(E) Whether taking loans can help the Social Security system tide over the problem of the reduction in funds coming in to the system
[Reveal] Spoiler: OA

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Re: QOTD #15 According to those in favour of privatisation of Social Secur [#permalink]

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New post 17 Jan 2017, 09:17
carcass wrote:
According to those in favour of privatisation of Social Security in the US, the current system is impossible to sustain. Decades ago, there were many more workers for every recipient but now the situation has reversed. Sooner or later, the fund will not be able to meet its obligations, because there will be more payments going out, than income coming in. Privatizing the system for the future recipients, while gradually phasing out the system for current and near-term recipients, is probably the best way to keep the system viable.

The answer to which of the following questions would be most useful in determining whether privatization of Social Security in the US would be a good idea?

(A) Whether privatization has proved successful for other government provided services such as employee provident funds
(B) Whether the population of the US is likely to increase significantly in the future
(C) Whether the growth in the number of workers is the US is likely to outstrip the growth in the number of dependents in the future
(D) Whether privatization of social security will lead to large scale protests by US citizens
(E) Whether taking loans can help the Social Security system tide over the problem of the reduction in funds coming in to the system


privatizing is considered because of the fund problem, So If loan can help society about the fund, then I think E is the correct answer.
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Re: QOTD #15 According to those in favour of privatisation of Social Secur [#permalink]

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New post 17 Jan 2017, 10:26
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Ans is C because, according to the critics, that is the exact reason why privatization will not be successful in current scenario

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Re: QOTD #15 According to those in favour of privatisation of Social Secur [#permalink]

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New post 17 Jan 2017, 17:53
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Since the real problem is between the difference between the outward and inward funds, it is essential to understand the growth in the number of people in each of those categories. C speaks of that.
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Re: QOTD #15 According to those in favour of privatisation of Social Secur [#permalink]

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New post 17 Jan 2017, 23:15
Ok I understand C is the right answer. But what's wrong with E? Is it out of scope or not related to the conclusion?
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Re: QOTD #15 According to those in favour of privatisation of Social Secur [#permalink]

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New post 18 Jan 2017, 00:52
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Answer is C
The author assumes that social security contributors will be outnumbered soon by recipient and hence there is need of privatization.
This argument is only valid if there is possibility of such event.

C) Whether the growth in the number of workers is the US is likely to outstrip the growth in the number of dependents in the future
If Ans is Yes for near future, then privatization needed.
If Ans is No for near future, then keep the existing system.

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Re: QOTD #15 According to those in favour of privatisation of Social Secur [#permalink]

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Re: QOTD #15 According to those in favour of privatisation of Social Secur [#permalink]

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New post 13 Oct 2017, 01:06
Can anyone explain options c and e
Also, in option c, what does the number of dependents in the future refer to?
I am having a hard time to comprehend option c
(C) Whether the growth in the number of workers is the US is likely to outstrip the growth in the number of dependents in the future
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QOTD #15 According to those in favour of privatisation of Social Secur [#permalink]

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sunny91 wrote:
Can anyone explain options c and e
Also, in option c, what does the number of dependents in the future refer to?
I am having a hard time to comprehend option c
(C) Whether the growth in the number of workers is the US is likely to outstrip the growth in the number of dependents in the future


E suggests to take loans to meet the shortage of funds. But the premise is already stating -" Sooner or later, the fund will not be able to meet its obligations", which would mean while taking loans might help in addressing the short term problem, later the same problem is going to arise.

C- Whether the growth in the number of workers is the US is likely to outstrip the growth in the number of dependents in the future
Explanation - The issue with current system is because of not being able to maintain a fixed ratio between the workers and recipients.
"Decades ago, there were many more workers for every recipient.." - Example 3 workers for 1 client (many to one relationship)- 3:1
"....but now the situation has reversed." - Now the ratio is reversed - 1 worker for many client- 1:3 (one to many relationship)
So if the number of workers exceed the number of clients in future the situation can again get stable, like it was a decade ago.This would suggest that we wont have to proceed with the privatization of Social Security in the US.
But if the answer is No to 'C', then we will have to go with the privatization.
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Re: QOTD #15 According to those in favour of privatisation of Social Secur [#permalink]

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New post 29 Nov 2017, 15:25
boiled down to A and C.
E is an important pattern b/c E suggests another solution. Also, such pattern often is out of scopes in many question b/c the pattern discusses sth else that is not directly linked with the argument.
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Re: QOTD #15 According to those in favour of privatisation of Social Secur [#permalink]

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New post 05 Jan 2018, 10:30
Can someone explain why A isn't the answer ?
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Re: QOTD #15 According to those in favour of privatisation of Social Secur [#permalink]

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According to those in favour of privatisation of Social Security in the US, the current system is impossible to sustain. Decades ago, there were many more workers for every recipient but now the situation has reversed. Sooner or later, the fund will not be able to meet its obligations, because there will be more payments going out, than income coming in. Privatizing the system for the future recipients, while gradually phasing out the system for current and near-term recipients, is probably the best way to keep the system viable.

The answer to which of the following questions would be most useful in determining whether privatization of Social Security in the US would be a good idea?

(A) Whether privatization has proved successful for other government provided services such as employee provident funds -Other funds are out of scope
(B) Whether the population of the US is likely to increase significantly in the future -Out of scope
(C) Whether the growth in the number of workers is the US is likely to outstrip the growth in the number of dependents in the future -Correct. If the income earning people become more in number than the payments going out (dependants) people, then the problem can be resolved.
(D) Whether privatization of social security will lead to large scale protests by US citizens -Protests are out of scope
(E) Whether taking loans can help the Social Security system tide over the problem of the reduction in funds coming in to the system -Taking loans will eventually lead to payment of debt. Thus, this can't be a good evaluation tool.
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Re: QOTD #15 According to those in favour of privatisation of Social Secur   [#permalink] 05 Jan 2018, 12:26
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