This sad election season has devolved into a battle between Hillary’s clear criminality and possession of a vagina and Trump’s taxes and whose vagina he may or may not have grabbed – but even sadder is the fact that the world keeps on turning and the deep state keeps on consuming liberty. Policy matters and legacy policies matter even more. Social Security has become the primary retirement income of a significant percentage of Americans.
Social Security long ago came untethered from the amount of contributions coming in and became a program of entitlements going out.
The progressive left gives birth to a live cow when it is noted that military spending makes up $600 billion (16%) of the federal budget – but not a word about entitlement spending (i.e. Social Security, unemployment and Medicare/Obamacare) that consumed $2.328 trillion.
When President Franklin D. Roosevelt signed the Social Security Act into law 81 years ago, he said that while “[w]e can never insure one hundred percent of the population against one hundred percent of the hazards and vicissitudes of life … we have tried to frame a law which will give some measure of protection to the average citizen and to his family against the loss of a job and against poverty-ridden old age.”
FDR, even as a progressive, was aware of the danger of this dependence, in November of 1934, he stated:
“We must not allow this type of insurance to become a dole through the mingling of insurance and relief. It is not charity. It must be financed by contributions, not taxes.”
The issue here is that the government has failed in its fiduciary responsibility. Quoting from FDR again:
“It is overwhelmingly important to avoid any danger of permanently discrediting the sound and necessary policy of Federal legislation for economic security by attempting to apply it on too ambitious a scale before actual experience has provided guidance for the permanently safe direction of such efforts. The place of such a fundamental in our future civilization is too precious to be jeopardized now by extravagant action. It is a sound idea–a sound ideal. Most of the other advanced countries of the world have already adopted it and their experience affords the knowledge that social insurance can be made a sound and workable project.
Three principles should be observed in legislation on this subject. First, the system adopted, except for the money necessary to initiate it, should be self-sustaining in the sense that funds for the payment of insurance benefits should not come from the proceeds of general taxation. Second, excepting in old-age insurance, actual management should be left to the States subject to standards established by the Federal Government. Third, sound financial management of the funds and the reserves, and protection of the credit structure of the Nation should be assured by retaining Federal control over all funds through trustees in the Treasury of the United States.”
EPIC FAIL as benefit payouts have greatly outstripped income from SS taxes. Remember how Democrats blow a gasket every time that anyone even mentions privatization? Even at a 2% rate like George Bush once proposed? Well, FDR clearly anticipated private sector participation at a much higher level than 2% – more like 50%.
FDR and his advisors were the birth parents of this Social Security, yet even they allowed for the possibility of private investment making up a complete “old age” pension plan. In a message to Congress about Social Security on January 17, 1935, FDR stated:
“In the important field of security for our old people, it seems necessary to adopt three principles: First, non-contributory old-age pensions for those who are now too old to build up their own insurance. It is, of course, clear that for perhaps thirty years to come funds will have to be provided by the States and the Federal Government to meet these pensions. Second, compulsory contributory annuities which in time will establish a self-supporting system for those now young and for future generations. Third, voluntary contributory annuities by which individual initiative can increase the annual amounts received in old age. It is proposed that the Federal Government assume one-half of the cost of the old-age pension plan, which ought ultimately to be supplanted by self-supporting annuity plans.”
FDR even contemplated an endpoint to government involvement in his programs.
“Ample scope is left for the exercise of private initiative. In fact, in the process of recovery, I am greatly hoping that repeated promises of private investment and private initiative to relieve the Government in the immediate future of much of the burden it has assumed, will be fulfilled.”
I know it is difficult for our progressive friends to admit that what they know about the history of their own movement is wrong and that the failure of the progressive movement can be chronicled in the words of their greatest hero, FDR – but as they say, it is what it is (depending on what the meaning of “is” is).
Should we end Social Security as we know it today? If America is to finally address the entitlement spending that is consuming the federal budget, it is a legitimate question that merits serious discussion.
8 thoughts on “The Sad Season is Sad”
Definitely we should end SS as it is today, but I think the original plan put in place 81 years ago may have been good for America and Americans.
It was ALWAYS a tax and a pay as you go scheme … there was a very famous case in the 1930s, the result of which the SC said that SS was a TAX ( no trust fund)….and that the Gov’t is NOT required to pay ANYTHING. In fact it is up to the executive on whether to pay or not.
SS is a scheme ….. Perry was correct a ponzi scheme…..but it was from its inception !
I don’t doubt that the govt totally screwed up SS. My point was that it could have helped many Americans have some “income” after they had to retire because of old age. If the govt took the 12.4% from the worker’s checks and employers’ kick-in of an American worker and invested it wisely, It could amount to a pretty decent income to retrieve after retirement. Once it was put into the general fund, it was never going to be good for anyone.
I agree…..IF it had been anything OTHER than the Social Security enacted….it COULD have helped.
But it was a ponzi scheme 81 years ago just as it is today.
As it is….. I agree SS should END.
Hillary AMNESTY Tax…..$15,000 per household. Total = $1.2 Trillion IMMEDIATE tax called for by Hillary.
Here’s a real life example of what Social Security COULD have been. I work for the State of Alaska. I know … I know … I hate the State, but I live in Alaska, where all the good paying jobs issue from the State of Alaska, so … at some point, principle gives into paying the mortgage. I resisted for three decades before I gave in to reality.
So, I’m working for the State of Alaska and I don’t pay Social Security anymore (I am eligible to collect because I have 30 years out in the real world). SOA takes 13% out of my check and matches 13% and puts it in the Tier 4 retirement system, which is invested along the same lines as the Alaska Permanent Fund.
While for years my Social Security “account” (yes, I know) had not grown at all, my SBA account has shown solid growth in every year. What’s more, the principle of the account is safe from market risks … what I and my employer put in there is guaranteed by my employer, even if the market goes into freefall.
There is no reason why some system like that couldn’t be set up with insurance to assure protection from marekt volitility. But they won’t because that would be a fund a president couldn’t raid to pretend to did away with the debt or that Congress couldn’t pretend to fund so we will be falsely secure in what isn’t there.
When we talk about doing experiments at the state level, this one has alreayd been in place for over a decade in Alaska and it’s doing pretty well. It replaced a massively underfunded system where administrative assistants were retiring with million dollar pension funds for however long they lived, so some of my coworkers complain about it. Having rolled my retirement from my years in the real world into the SBS system, I can tell them that SBS has done a better job with my old retirement than did my former employers’ bund manager. I won’t be wealthy when I retire, but I’ll be able to pay the bills.
Ding Dong the Witch is Dead !! The wicked witch of the East is Dead.
Mexico and Canada are willing to re-negotiate” NAFTA !!!
“When the righteous are in authority, the people rejoice, when the wicked rule, the people groan.” –Proverbs 29:2a