Nothing gets the Democrats’ partisan juices flowing faster than Republican attempts to straighten out the ailing Social Security system before the ailment becomes terminal.
Most Americans, unaware of the machinations and deceptions that attended the birth of Social Security when it was signed into law on August 14, 1935, think it’s some kind of pension system where they pay premiums in the form of payroll taxes which are put aside in a trust fund from which they can draw benefits once they reach the age of 65.
The late Sen. Carl Curtis, R-Neb. elected to the U.S. House of Representatives in 1939, made a careful study of Social Security when it began making payments in 1940. As he told a friend of mine, he tried mightily to get the Roosevelt administration to stop calling the program an old-age insurance program and describe it for what it is: a tax on workers to pay benefits to those no longer working. Had they and his colleagues listened to him we wouldn’t be facing a fiscal catastrophe down the road.
But nobody was in the mood to listen because they recognized that the Social Security system would be the goose that laid the golden eggs – not for workers and retirees, but for Congress and the federal government who could loot the system to their heart’s content, using the money to pay for all the social welfare spending schemes they otherwise would have had to finance by raising income taxes.
Social Security was a Ponzi scheme that carried within it the seeds of an eventual collapse as long as it continued to be operated as it was created to operate. It was based on what amounts to a series of misjudgments and criminal deceptions.
• When the government established Social Security, they didn’t plan for most Americans to live long enough to collect the benefits. In 1940, the life expectancy was 63.6 years and the age at which benefits were paid was and is 65. And if you did live that long, you probably wouldn’t have been around much longer to draw money from the system. In other words, they found a new way to collect money from you based on the fiction that that it was yours and you could start collecting it when you reach 65, which they figured most of you would not.
• The government claimed that the Social Security taxes you paid belonged to you, and were being squirreled safely away in a trust fund on which you could begin to draw at the age of 65. But instead of putting the money in a trust fund, the Treasury spends the difference on roads, sex-education programs, parks etc. The trust fund gets an I.O.U. If you die before reaching 65, which they expect you to be gracious enough to oblige them by doing, your survivors in most cases collect a big fat zero.
Things are no different today, except that we Americans have been stubborn enough to live a lot longer, with life expectancy of the average American now approaching 80. That of course means that if you retire at 65 and live to be 80, you’ll be collecting benefits for 15 years. That’s significant in light of the fact that there are fewer and fewer workers paying into the system to provide Social Security benefits to more and more retirees.
Wrote the Heritage Foundation’s Rich Tucker “… starting in 2018 … the system will owe more in benefits than it will collect in taxes. Heritage Foundation Social Security expert David John estimates ‘annual deficits will exceed $100 billion within about five years, $200 billion after about ten years, and $300 billion after about fifteen years.'”
At that point the burden will fall on income tax payers who will get socked with a horrendous tax bill.
This is what President Bush is trying to deal with. Tragically, the Democrats like the system just as it is – they’re hooked on looting the trust funds and they don’t want to get off the gravy train. Keep that in mind the next time you hear one of them lying about those rascally Republicans plotting to kill Social Security.
©2005 Mike Reagan. You must contact us if you would like to print this column in your publication or post on the internet. Mike’s column is distributed exclusively by: Cagle Cartoons, Inc. Cari Dawson Bartley Cari@cagle.com, (800) 696-7561