Tales from the old-timer
Social Security Doomed Critics Say
Some friend of mine, worried that I might be drifting into the forbidden waters of liberal thinking, has paid for a subscription to a magazine put out monthly by Hillsdale College, a school so conservative that it wont accept any form of federal grant funds. The college was founded in 1844, and enrollment, as shown in the 2006 World Almanac and Book of Facts, is 1,273 students.
The magazine offers well-written articles each month giving conservative viewpoints on various topics. The last edition had an article denouncing the Social Security system as an entitlement program. Entitlement programs are considered monsters devouring our country and its prospects for the future.
The program has always had critics. In March 1935 Senator Daniel O. Hastings, a Nebraska Republican and bitter enemy of Social Security, commented, My fear is that when the Federal Government undertakes the job of Social Security through direct taxation for that purpose, it has taken a step that can hardly be retraced. I feel it may end the progress of a great country and bring its people to the level of the average European. It will bring delicious food and add great strength to the political demagogue. It will assist in driving worthy and courageous men from public life. It will discourage and defeat the American trait of thrift. It will go a long way toward destroying American initiative and courage.... and so on he went.
Some of those average European countries today have a per capita income greater that we do, notably Switzerland.
A recent letter to the editor of the Peshtigo Tmes complained that dependent children and disabled persons under retirement age get benefits from OASI (Old Age and Survivors Insurance as it is properly called), and this shouldnt be, he declared.
The Bush administration tried a couple of years back, to permit privatization of 20% of a workers social security tax to be invested in the stock market. It sounded like a deceptively great idea, a first step in privatizing the whole program, but was soundly rejected by Congress.
Every industrialized country on earth has the equivalent of Social Security. German Chancellor Otto Von Bismarck, a tough conservative if there ever was one, started social security in Germany in 1884. We didnt have it for 50 more years.
Some folks complain that a person can pay the tax for many years, and die before they are eligible to get a dime. Thats because it is an insurance program. My wife and I have paid for fire and windstorm insurance over 50 years and never had fire or windstorm damage, and we havent collected anything. Never filed a claim. We were protected, nevertheless, and dont consider it a bad investment.
Another critic wrote in once that retirees get back more than what they paid in, I dont know of any retirement pension, including the 401K plan, that doesnt pay more than what came in.
Social Security is an irrevocable contract between the generations. As the Baby Boomers move into retirement the system will come up short, but adjustments must be made to offset the demographics; either by raising the payroll taxes or by approprations from general revenues. The government takes every dollar that comes in, but every dime of that is borrowed money and must be paid back.
The system was substantially liberalized during the Republican administration of President Dwight Eisenhower, with SSI added for blind, disabled people, or elders living in poverty.
Some enemies of the system have suggested imposing an income ceiling for social security beneficiaries. This would make it a public aid program with an eligibility test, and people will start carrying on about welfare Cadillacs, and Look at the fine house those people have, and mowing their grass with a new lawn tractor, and they are collecting Social Security!
We old folks have earned every penny. We worked and paid taxes and raised our kids and fought the countrys wars. In fact, I am still working at age 83 and paying my social security tax, though I must confess I am coming out ahead, due to a lucky, healthy old age.
As to privatization, there is no law I know of that forbids anyone from investing in the stock market. Just dont mess with the Social Security system with stock market options.
My mothers dad, a railroad section boss, died of TB in 1933, leaving grandma at 57 years old, a diabetic lady who worked hard all her life on a hardscrabble one cow, 3 pigs, 40 chickens piece of land in Channing, in the UP, and no money. She had to sell the house and land in a few years and lived by turns with her children. She had high hopes for the Townsend Plan, an idealistic dream for old folks to get $200 a month with instructions to spend it, not save it. It was an early notion about an economic stimulus that has become legitimate government doctrine in 2008.
My dads folks lived long enough to get the first wave of benefits in 1940, enacted during the Franklin Roosevelt administration. Grandpa was 75 and grandma was 71 when those first beautiful green checks arrived in the mail.
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