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Friday, March 11, 2011
 What people say about Social Security...

Topic: Commentary

In the grand scheme of things Social Security isn't one of the most important issues at the moment in terms of budgetary concern. The program is relatively secure, well funded, and well liked, however the way in which people talk about Social Security is an extremely important indicator of their overall approach to dealing with America's fiscal issues, their understanding of America's budget problems, and the ways in which they are likely to address other budgetary and fiscal issues.

How people address Social Security is such a important indicator of their overall knowledge and approach to budgetary and fiscal issues because the finances of Social Security are so simple and straight forward. It is an easy system to understand, with well defined inflows and outflows, and no complex budgeting.

Before we go any further we have to keep in mind that Social Security is funded by the FICA tax (which also includes the 2.9% tax for Medicare as well), and the Social Security portion of the FICA tax has always only been applied to payroll income up to a certain limit. That limit changes over time and is currently $106,800, which means that the 12.4% FICA tax rate is only applied to income from wages and salaries, not capital gains, etc., and it only applies to income below $106,800. Thus, the FICA tax is the most regressive tax in the country, and right now the total revenue raised from the FICA tax is roughly equal to the total revenue raised from the income tax. This means that the taxes raised from payrolls under $106,800 is virtually the same as the taxes raised on all other income. Over the past 30 years this has not generally been due to increasing levels of Social Security taxation, but falling levels of taxation on individual income and corporations. During this time, excess revenue from Social Security has served as a major source of revenue for the federal government, essentially offsetting tax cuts on higher incomes and corporations. It has essentially been a highly regressive stealth income tax.


source: http://motherjones.com/politics/2011/02/income-inequality-in-america-chart-graph

We often hear people claim that addressing America's long-term deficits will require "reforming entitlement programs", including Social Security and Medicare. While future Medicare spending is projected to grow significantly, which will likely lead to future budget problems, Social Security does not currently, and never will, contribute to America's deficit. In fact, Social Security is forbidden by law from ever running a deficit. Social Security cannot legally ever go into debt or add to the deficit, and so, regardless of anything else, Social Security is not now, and will never be, a contributor to the federal deficit. If Social Security revenues are insufficient to pay promised benefits, the system is required by law to pay lower benefits, not to borrow to pay promised benefits.

There are in fact two completely different issues that have to be considered when talking about Social Security finances, paying back the "Trust Fund" and long-term budget shortfall forecasts. First lets address the Social Security "Trust Fund" issue.

When many people talk about Social Security adding to the deficit, what they are talking about is the "repaying" of the Trust Fund. What "repaying" the Trust Fund actually involves is "selling" the securities held by the Trust Fund. How this is exactly done can make a big difference. Over the past 30 years $2.5 trillion in excess Social Security taxes have been collected and "put into the Trust Fund", which essentially means that they have been buy long-term government bonds, thus that $2.5 trillion served to finance the national debt. It is a debt owed to American workers and retirees who paid excess taxes for the past 30 years in order to establish a "savings" for payment of Social Security benefits to the baby boomer generation.

What is important to keep in mind is that the Social Security system is not the cause of the debt, the Social Security system was used to finance debt that was already being incurred. If either the Social Security Trust Fund didn't exist or the money for the Trust Fund was put into something else, like for example invested in the stock market, either that debt would still have been incurred or income taxes would had to have been raised in order to avoid the debt, which means that total tax rates would had to have been higher for the past 30 years had the Trust Fund not existed in its current form.

To say that any strains placed on the budget due to the redeeming of securities in the Trust Fund are "caused" by Social Security would be like saying that the Chinese are a cause of our deficits due to the fact that we have to pay them back for the money we borrowed from them. Or, as a more individual example, it would be like borrowing money from your 401K (which you are legally required to pay back), and then when you have to pay the money back, stating that your 401K is the cause of you not having enough money.

The fact is that Social Security taxes have been financing the deficit for the past 30 years. Over the next 30 years there won't be a Social Security surplus to continue financing the deficit, and on top of that, either money will have to be raised from general revenue to pay for the securities that are redeemed from the Trust Fund each year to pay for Social Security benefits, which would reduce the national debt, or those securities will have to be sold to other debt holders, thus doing nothing to reduce the debt, just transferring it from the Trust Fund to private debt holders.

Any attempt to "reduce the deficit" by making changes to Social Security necessarily means defaulting on the debt, or at the very least extending the terms of the loan agreement in such as way as to defraud those who paid in the extra taxes in the first place. Social Security itself will never ever add to the deficit, it legally can't. The only thing that can happen is that it can have insufficient funds to pay the scheduled benefits, but it can't run a deficit.

Any talk of raising the retirement age or reducing benefits in order to "reduce the deficit" really equates to defaulting on the securities held by the Trust Fund, not paying back money that is owed the Social Security system, ultimately the American retirees who paid into it. But those who claim that reductions in benefits are needed to "reduce the deficit" don't put it that way. What they are really saying, however is, "our plan to reduce the deficit is to not pay back our creditors," and in this case, "our creditors" are us. Framing the issue as deficit reduction is just a way of tricking the public into agreeing to being defaulted on by the federal government.

The federal government currently has a debt of over $14 trillion, of which $2.5 trillion is held by the Social Security system. Of that $14 trillion in debt, the $2.5 trillion held by Social Security is the money we should be most obligated to pay back in a timely way. The other $11.5 trillion is owed disproportionately to wealthy individuals, institutions, and foreign governments, those who least need it. The $2.5 trillion owed to Social Security is owed  disproportionately to America's least advantaged, the disabled and elderly, and mostly to those in the poor and middle class. Make no mistake, what those advocating "reducing the deficit through adjustments to Social Security" are talking about is writing off a portion of that $2.5 trillion which is owed to America's poor and middle class retirees, in order to make it easier to pay back the $11.5 trillion owed to wealthy bond holders and foreign governments.

The simplest way to think about it is that the Social Security Trust Fund, for the past 30 years has forced America's poor and middle-class to become one of the largest financiers of the national debt. Of all of the national debt, the debt financed by the Social Security Trust Fund is the portion of the national debt most heavily paid for by poor and middle-class Americans.

Claiming that paying back the money owed to Social Security will "add to the deficit" is no different than saying that paying back any of the debt we owe will "add to the deficit". The lenders aren't the cause of the deficits, the borrowing is the cause. The Social Security system (financed by taxes levied entirely on low and middle incomes) has been one of the major lenders to the federal government for 30 years, now the bill is due.

Now let's move on to issue number two, the long term funding of Social Security.

The Social Security system is currently on track to exhaust the money allocated to the Trust Fund and be unable to meet the currently projected benefit obligations in about 30 to 50 years. That's a pretty long way off. At that time the Social Security system, according to current projections, would not have enough money coming in to pay out the promised benefits. At that time it is estimated that if nothing at all is done, Social Security would be able to pay out approximately 75% of the currently scheduled benefits indefinitely, meaning that if no changes are made, in about 40 years the benefits would be about 75% lower than what the currently promised benefits for those retirees are. However, also keep in mind that the way that benefits are calculated also means that in about 40 years the currently promised benefits would be higher, even after adjusting for inflation, than what current recipients receive. This is because benefits grow faster than the rate of inflation (which is a potential problem with the benefit calculation), so the fact that we wouldn't be able to pay the fully promised benefits in 40 years doesn't even mean that people in 40 years would be getting less than people now, it means they would probably be getting the same amount as people now, because the promised benefits for people retiring in 40 years are higher, even after adjusting for inflation, than what people get today (according to projections, which are so far off they could be largely meaningless).

So even doing nothing at all is no tragedy. But the real question is, why do we have this projected shortfall in the first place, since back in 1983 the National Commission on Social Security Reform, appointed by Ronald Reagan and headed by Alan Greenspan supposedly "fixed" Social Security for good by significantly raising the FICA tax (from 6% to 12.4%) and eliminating various exemptions, etc.?

The biggest factor in the projected shortfall of Social Security has been increasing income inequality. When the calculations were made for funding Social Security they were made based on the assumption that both the ratio of payroll income to capital gains would stay the same and the distribution of payroll income would stay the same. After all, these ratios were relatively stable for the 30 years that preceded the action of the Social Security Commission (which began meeting in 1982). The data that they had to look at showed stable income distributions for 30 to 40 years. However, beginning in the 1980s income distributions began shifting dramatically, both the portion of Gross National Income going to payrolls and the distribution of income within payrolls.

What has happened over the last 30 years is that the portion of national income subject to the FICA tax  has steadily decreased. It is sometimes noted that back in 1983, then the revisions to Social Security were made, that 90% of payrolls were subject to the FICA tax, and today that has dropped to around 84%, but what most people fail to also point out is that payrolls themselves, as a percentage of national income, have been falling as well.

In 1983 close to 60% of Gross National Income was subject to the FICA tax, whereas today that has dropped to around 53%.


source: http://www.stateofworkingamerica.org/charts/view/160


Comparing the percentage of national income subject to Social Security taxation prior to 1983 is largely meaningless since the rates were much different, the caps were different, and there were many different exemptions from the program, etc., so it's simply not comparable.

This is the the fundamental root cause of the long-term funding issues with Social Security. Anyone who attributes the long-term funding issues with Social Security to any other cause, such as declining number of workers to retiree, people living longer, etc., etc., is either lying or doesn't know what they are talking about, period, it really is that simple.

The number of workers per retiree has been stable at around 3 workers per retiree for 40 years, and is projected to fall to 2 workers per retiree by 2030. While this is a decrease in the number of workers per retiree, productivity per worker has also increased dramatically over this time as well and can be expected to continue in the future. The problem is simply that over the past 30 years 98% of that economic increase has been captured by the highest 10% of income recipients, and thus virtually all of the increased productivity over the past 30 years has been untaxed by FICA, and without any changes will continue to be untaxed by FICA in the future. We could easily support an increasing number of workers per retiree if all, or at least more, economic growth were taxed by the Social Security system. The way the system currently works it is as if we are trying to support an increasing number of workers per retiree in an economy with zero economic growth. That, of course, wont work. The taxes being paid into the Social Security system over the past 30 years have been capped in such a way as to not capture any economic growth, only population growth, it is as if Social Security in 2011 is still being funded by the economy of 1970.

There are three ways to address this problem. The first is to get income distributions back to the way they were in 1980 and keep them there forever. The second is to change the formula for calculating the FICA tax cap so that it is pegged to the percentage of payroll income needed to fund Social Security instead of to a wage index (meaning that if we need to tax 90% of payrolls to fund the program, then set the cap to whatever will capture 90% of payrolls each year). The third would be to fully eliminate the cap on the FICA tax and apply the FICA tax to capital income as well as payroll income.

The first option is obviously the least likely to ever happen. That's pretty much a non-starter, even if you are in favor of lower income inequality. We can't rely on lowering income inequality to fix the system. That option is out.

The second option is workable, and unfortunately is probably along the lines of what would most likely be done. It still isn't perfect and will still have problems dealing with a changing ratio of capital and fringe benefit income to payroll incomes. If the portion of national income going to capital gains continues to increase, even this fix will eventually run into the same problem that we are currently facing. In addition, this would also mean preserving the currently exorbitantly high FICA tax rate of 12.4% on all payrolls below the cap.

The third option is to remove the FICA taxation cap entirely, and apply the tax to capital income in addition to payrolls. This also necessarily implies keeping the benefits the same as what they are now, even though people with high incomes would be contributing much more into the system. However, by doing this it would effectively solve the problem of income distribution leading to shortfalls, and it would allow for a significant reduction of the FICA tax. The current FICA tax of 12.4% could be cut roughly in half to around 6% and still bring in more money than currently, if the cap were removed and it were applied to capital income as well.

This means that someone with an average income of $5 million a year for 30 years would pay $9 million in FICA taxes, but still only receive roughly $2,000 a month in retirement benefits.

The third option, or at least the option of removing the taxation cap, is also by far the most popular option among America. Every poll for the past 5 years that asks about ways to fix Social Security funding and gives the option of "remove the taxation cap" has shown that removing the taxation cap is favored overwhelmingly by roughly 70% of Americans and is always the number one option selected as the best way to fix Social Security finances. See as one example: Poll: Fix Social Security by Taxing Wealthy

When the Social Security Commission met they combined the OASI (Old Age and Survivorship Insurance) and DI (Disability Insurance) programs into OASDI. The 12.4% FICA tax now goes toward OASDI combined. Of that 12.4% tax, however, 1.8% of it goes to the DI program. Even president Obama's conservative deficit commission has listed eliminating the cap on the DI portion. So, if nothing else at least that should be done, and be done quickly. By eliminating the cap on the DI portion the DI tax rate could probably be reduced to 1.4% (cutting the total FICA tax to 12.0%) and still bring in more revenue.

As it stands right now, we have a situation where essentially the entire burden of paying for the disabled falls entirely on the poor and middle class, while those with high income pay virtually nothing toward the care of the disabled. This, of course, is completely ludicrous.

To sum things up here, the fact is that the finances of the Social Security system are not a pressing issue, but nevertheless what people say about the finances of the Social Security system can tell you a lot about both their understanding of the federal budget and their ideological biases.

Anyone who claims that "fixing Social Security" is a component of reducing the deficit is either lying or uninformed, period. The Social Security system never has and never will add one dime to the deficit. The Social Security system, through taxes levied entirely on middle to low wages, has been one of the biggest financiers of the national debt for 30 years. The root cause of all of the fiscal problems with Social Security is income inequality and a system of taxation and benefit adjustment that doesn't take changing levels of income inequality into account. The system was designed under the assumption of static levels of income inequality and a static level of gross national income going to payrolls. As both the portion of national income going to capital income has increased and income inequality has increased both the revenue and expenditure have failed to account for these conditions and thus revenues are falling behind and expenditures are increasing too much.

The way to fix the system then, is not to do something like raise the retirement age, which is just a completely unrelated action that just works around the underlying problem, but rather it is to fix the formulas or take income inequality completely out of the equation by eliminating the taxation caps and applying the tax to all forms of income. The first solution, fixing the formula, would result in a balanced Social Security budget and the ability to keep the benefits essentially unchanged while raising the FICA taxation cap and keeping the tax rate the same, while the second solution would allow us to cut the FICA tax roughly in half while still maintaining benefits. In addition, taking either one of these actions, by bringing in more revenue immediately, would allow for a slower draw down of the Trust Fund, thus reducing the rate at which that debt would have to be paid back, while neither decreasing benefits nor raising taxes on the poor or middle class, who have already been overpaying for the past 30 years.

See also:

The Truth About Social Security

The real deal with Social Security

REPORT OF THE NATIONAL COMMISSION ON SOCIAL SECURITY REFORM JANUARY 1983


Posted by rationalrevolution.net at 10:44 AM EST | Post Comment | View Comments (33) | Permalink
Updated: Wednesday, March 16, 2011 7:41 AM EDT

Saturday, March 12, 2011 - 4:32 PM EST

Name: "TheMisesKing"

Dude, if we were not going into debt from Social Security, why would people say it is in crisis?

Saturday, March 12, 2011 - 9:10 PM EST

Name: "johnny"

The Truth about Social Security, linked to under the See alsosection at the end of the post, would be where you want to look Misesking

Sunday, March 13, 2011 - 6:53 PM EST

Name: "TheMisesKing"

I ask again, if the situation was like this, why are people fighting tooth and nail to remove it?

Sunday, March 13, 2011 - 10:33 PM EDT

Name: "Mitch Gurney"

TheMisesKing:

The answer to your question lies in paragraphs 9 thru 11 - specifically in paragraph 11:

 

“Any talk of raising the retirement age or reducing benefits in order to "reduce the deficit" really equates to not defaulting on the securities held by the Trust Fund, not paying back money that is owed the Social Security system, ultimately the American retirees who paid into it. But those who claim that reductions in benefits are needed to "reduce the deficit" don't put it that way. What they are really saying, however is, "our plan to reduce the deficit is to not pay back our creditors," and in this case, "our creditors" are us. Framing the issue as deficit reduction is just a way of tricking the public into agreeing to being defaulted on by the federal government.”

 

It’s important to understand in order to partially finance the nation’s $14 trillion deficit the government has “borrowed” the $2.5 trillion from the Social Security “Trust” fund by taking the cash and issuing bonds – IOUs - the Trust now holds with varying maturity dates that are coming due. In other words the government needs to begin paying back the cash it “borrowed” from Social Security, money rightfully due the taxpayers. But the government doesn’t have the cash, it’s has already been spent. In order to raise the cash the government (the Treasury) will need to issue new bonds – new IOUs - to sell to investors. These new bonds will eventually be paid back by the taxpayers. In essence taxpayers will be tax twice, the first time when they paid their FICA tax and the second time when taxed to pay off the bonds.

 

So now if policy makers can confuse the tax payers into believing that Social Security is a contributing cause for the deficit rather than one of its financing sources they will in essentially succeed in carrying off a massive fraud …

 

See the following articles:

The Fraud at the Heart of Social Security

 http://www.oftwominds.com/blogjan11/Social-Security-fraud01-11.html

“…the cash has been siphoned off and spent on Federal government outlays. The Fund holds no cash. Instead, it has been given IOUs "backed by the full faith and credit of the United States," the non-marketable securities...taxpayers' Social Security taxes have been squandered on other Federal expenses, and they have to pay interest on Treasury debt which is borrowed to pay their SSA benefits. In other words, taxpayers pay twice: once via Social Security taxes, a substantial 12.4% of all wages, and then they pay again to borrow cash on the bond market to actually pay the Social Security benefits…”

 

To Fix Social Security, First Ask Why It Is Deep in the Red

http://www.oftwominds.com/blogjan11/Social-Security-problems01-11.html

How to Fix Social Security: A 4-Point Plan That Faces the Brutal Realities

http://www.oftwominds.com/blogjan11/Social-Security-fixes01-11.html

Sunday, March 13, 2011 - 10:41 PM EDT

Name: "Mitch Gurney"

TheMisesKing:

To summarize:

“…if policy makers can confuse the tax payers into believing that Social Security is a contributing cause for the deficit rather than one of its financing sources they will essentially succeed in carrying off a massive fraud …”

The closing sentence in paragraph 11:

“Framing the issue as deficit reduction is just a way of tricking the public into agreeing to being defaulted on by the federal government.”

Monday, March 14, 2011 - 3:47 AM EDT

Name: "TheMisesKing"

Thanks I guess, but this doesn't answer my question.  I'm asking why there's this vast conspiracy to make social security look bad, because according to you guys, it's not putting us into debt.

Monday, March 14, 2011 - 8:21 AM EDT

Name: "rationalrevolution"
Home Page: http://www.rationalrevolution.net

The issue is fairly straight forward. The Social Security system itself faces no major problems, and has nothing to do with the deficit. Over the past 30 years excess Social Security taxes have funded the deficit.

At no point in the future will the Social Security system, from an accounting basis, ever, ever, ever contribute to the deficit.

But as I said in the original post, when people talk about Social Security being a part of the deficit problem, what they are really talking about is paying back the "Trust Fund".

And the "Trust Fund" issue all boils down to this: The "Trust Fund" represents $2.5 trillion in excess taxes levied on the poor and middle class over the past 30 years. The only reasonable means of "paying it back" would be to raise taxes on the rich, since it is the rich who benefited from lower taxes by having the government funded from excess taxes on the poor and middle class for 30 years.

Therefore, those who advocate rolling back benefits etc. to "reduce the deficit" are saying they want to roll back benefits to "reduce the rate at which (or at all) that we "pay back the Trust Fund"".

The Trust Fund is money taxes from and owed to America's poor and middle class, and paying it back would presumably require raising taxes on America's wealthy, hence the reason that opponents of the system and defenders of the rich are calling for cuts instead of paying back the debt.

There is a decent discussion of this on wikipedia here: http://en.wikipedia.org/wiki/Social_Security_Trust_Fund#An_Economic_Perspective_on_the_Structure_of_the_Social_Security_Trust_Fund 

And don't forget , it was Alan Greenspan and Ronald Reagan who created the "Trust Fund".

Monday, March 14, 2011 - 12:55 PM EDT

Name: "TheMisesKing"

Well, that doesn't make sense, the rich have more than enough money, why would they avoid paying to stop a debt?  I never hear this on Fox News or even on MSNBC.

Monday, March 14, 2011 - 4:27 PM EDT

Name: "johnny"

I think it's becoming pretty clear that Mises has no interest in participating in an actual discussion. 

Monday, March 14, 2011 - 7:09 PM EDT

Name: "TheMisesKing"

No, johnny boy, I'm simply asking a question.  I swear, dealing with you left wing retards takes a lot out of me.  I should ask my friends to help me out here and fight against this propaganda you idiots are spouting out.

Monday, March 14, 2011 - 9:37 PM EDT

Name: "boogerjames"

"It is a well know fact that reality has liberal bias." - Stephen Colbert

Monday, March 14, 2011 - 11:23 PM EDT

Name: "Reader"

Well acutally Johnny I disagree.

 It seems like TheMisesKing is no longer denying Rationalrevo's arguement outright, a sign that this conversation is moving in a more rational direction.  Let's not inhibit that.

 However, I do have a question for TheMisesKing:                                 Do you have any evidence that directly contradicts what Rationalrevo has posted?  

this isn't "propaganda" from some organization of commies. There is clear concrete information for what Rationalrevo has said and he has given it.  Let's get our egos under control before this conversation gets nonsensical.

Monday, March 14, 2011 - 11:27 PM EDT

Name: "TheMisesKing"

Well I'm not denying anything, I'm just curious as to why this situation is as it is.

Thursday, March 17, 2011 - 6:33 PM EDT

Name: "pappyg"
Home Page: http://www.aarp2.com

The social security debate can't be about raising retirement age, or lowering benefits or any ohter kabuki dance.  Social security has been turned into an adulterouls financial affair, leaving millions of middle class working and retired Americans feeling like rented mules.  It's time for a "come to Jesus" moment: This issues shines light shines the light on issues no one is talking about:  http://www.slideboom.com/presentations/321481/Social-Security-A-Financial-Affair 

Here's a proposal to repair this adulterous financial affair:  http://www.slideboom.com/presentations/322040/Social-Security---Repairing-A-Financial-Affair

Thursday, March 17, 2011 - 11:00 PM EDT

Name: "Mitch Gurney"

Mises:

Perhaps you have some thoughts of your own to explain why this could be happening? 

Sunday, March 20, 2011 - 2:44 AM EDT

Name: "TheMisesKing"

I always assumed Social Security was a socialist handout system putting us in debt.  It still seems so.

Sunday, March 20, 2011 - 7:26 PM EDT

Name: "anonymous"

Do you even read the articles, I mean actually read it, skimming doesn't count.  Everytime I read your comments it's just babbling that has nothing to do with what the article talk abouts.                                         And you obviously don't know what socialism or capitalism is.

Sunday, March 20, 2011 - 9:32 PM EDT

Name: "Mitch Gurney"

Mises:

 

You assume? The process for assuming is not the same as for thinking …

 

Please explain how social security is a “socialist handout  putting us in debt” when in order to be eligible to receive retirement benefits you must have paid 10 years of FICA (social security tax) and  to receive Medicare benefits you need to be eligible for Social Security. You have noticed FICA deducted from your paychecks haven’t you?

 

Your retirement benefit is based on how much you earned during your working career. Higher lifetime earnings result in higher benefits:

 

http://www.socialsecurity.gov/pubs/10035.html

Saturday, March 26, 2011 - 8:07 AM EDT

Name: "TheMisesKing"

I'm not really in the mood for another argument after ripping those communist in the other post a new behind.  All I can say is people got along just fine without social security, so get rid of it.

Monday, March 28, 2011 - 1:22 PM EDT

Name: "boogerjames"

Mises is Tea-bagging troll. Just go look at his other posts where he tears us commie socialists. My favorite is his explaination of why homosexuality is bad. Mises claims it destroyes families and I politily asked him how it does that. He gave a personal example about how it destroyed his familiy because he had to disown his son for being gay.

This is the highest quality of rational thought you will see on his part. In what may be the epitome of his tea/douche-baggery, he still doesn't understand why the above doesn't sit well with us pinko lefties.

Where's a purple triangle emoticon when you need one. 

Monday, March 28, 2011 - 6:09 PM EDT

Name: "Mitch Gurney"

Mises:

 

“People got along just fine without social security” Really? Are you speaking from personal experience or passing along an opinion?

 

Based on boogerjames comment it sounds like you may be nearing retirement or perhaps already retired? Do you plan on or are you already drawing from your Social Security retirement fund?

 

I have no doubt wealthy people have perhaps gotten along just fine without it and perhaps you are such a person…

 

Social Security was adopted in late 1935 during the depression era. Did you grow up during that time and know of the conditions first hand?

 

“The decade of the 1930s found America facing the worst economic crisis in its modern history. Millions of people were unemployed, two million adult men ("hobos") wandered aimlessly around the country, banks and businesses failed and the majority of the elderly in America lived in dependency. These circumstances led to many calls for change.”

 

“Following the outbreak of the Great Depression, poverty among the elderly grew dramatically. The best estimates are that in 1934 over half of the elderly in America lacked sufficient income to be self-supporting. Despite this, state welfare pensions for the elderly were practically non-existent before 1930. A spurt of pension legislation was passed in the years immediately prior to passage of the Social Security Act, so that 30 states had some form of old-age pension program by1935. However, these programs were generally inadequate and ineffective. Only about 3% of the elderly were actually receiving benefits under these states plans, and the average benefit amount was about 65 cents a day.”

http://www.socialsecurity.gov/history/briefhistory3.html

 

Even the history leading up to the crash of 1929 doesn’t support your claim that the vast majority of “people got along just fine without it”

 

Please enlighten us with what you know about all this that differs from the historical record.

Monday, March 28, 2011 - 6:31 PM EDT

Name: "Mitch Gurney"

Boogerjames:

 

A very good book that sheds some light in how we shape our political and social values that influence how we vote is: “Don’t think of an Elephant” by George Lakoff.

Contrary to what most think we primarily vote our values which are rooted in part on family values.

Have you ever wondered how some poor conservatives support the corporate bailouts yet not support social programs that help the needy? The book I recommended answers that and other such perplexing questions and why we often vote against our own best interest…

Wednesday, March 30, 2011 - 10:45 AM EDT

Name: "boogerjames"

Mitch, thanks I will check that out.

For an explanation on how the conservative right won over the poor midwest and conviced them to vote against their best economic interests, I recommend "What's the Matter with Kansas" by Thomas Frank.

As you might infer from the the title, it outlines the history of Kansas politics and explains how Kansas politics have gone from populist to uber-right conservative. While Frank focuses solely on Kanses, the explainations that he gives for the political shift can be used to explain the shift in Christain politics from populism to conservatism.

Wednesday, March 30, 2011 - 6:53 PM EDT

Name: "Mitch Gurney"

boogerjames:

Thanks ...I will check out the book you have recommended.

Tuesday, April 5, 2011 - 4:55 PM EDT

Name: "TheMisesKing"

Sorry for taking so long to respond, I've been busy.  I'll write up a more clear response later today, but I wanted to say I'm not old or receiving social security checks, my son is only 14 and I sent him away to live with his mother, I don't want a gay person in my house.

Monday, April 18, 2011 - 7:41 PM EDT

Name: "TheMisesKing"

Well, it's been awhile, and I see no one was able to give me any real credible response.  Social Security=drain on the system.  Can anyone even give me a glimpse into life before social security?  I can, it was the roaring 20s.

Wednesday, April 20, 2011 - 11:45 PM EDT

Name: "tom"

Did you see the berkley bedell opinion peice, Des Moines register?

 its very good

Thursday, April 21, 2011 - 10:19 PM EDT

Name: "anonymous"

@TheMisesKing

you idiot, it was the "roaring twenties", which was followed by the Great Depression, my God you're stupid.  The roaring twenties caused the Great Depression. What you have said is the silliest thing I have ever heard. 

And it's not even like the Roaring Twenties was some American golden age, the middle class was still as tiny as it was before and the poor went on being poor, only the wealthy really enjoyed the great "roaring twenties".

fool.

and if nobody responded to you it's cause they don't care enough

Friday, April 22, 2011 - 12:21 AM EDT

Name: "Mitch Gurney"

Thanks anonymous for responding to Mises post about the roaring twenties…I had provided a historical glimpse into life before Social Security, see my post dated Monday, March 28, 2011 (9th post above this one). But Mises proves by asking his question “Can anyone even give me a glimpse into life before social security?” that either he doesn’t read or that he chooses his view over historical facts, both of which may explain his condition.

Additionally he had promised to “write up a more clear response later today” in his post dated Tuesday, April 5, 2011 after being asked several questions… but so far he’s not enlightened us with his “clear response.” Perhaps this too has something to do with his condition. (There may have been a few us politely waiting for him to follow up).

I fear his condition may be an epidemic in America today and hope it’s not contagious.

There appears little point in engaging in further conversations with him.

Sunday, May 8, 2011 - 5:11 AM EDT

Name: "Durandal"

He seems to have driven away that Ismail guy and his Norwegian friend.  I enjoyed talking to that guy.

Friday, September 23, 2011 - 8:43 AM EDT

Name: "Chanteuse"

Dude, because PEOPLE ARE DUMB and they won't bother to understand the facts.  The facts are here.  Read them.  Attempt to work the brain.

To repeat what has been said below:

"Framing the issue as deficit reduction is just a way of tricking the public into agreeing to being defaulted on by the federal government.”

 

 

Tuesday, November 22, 2011 - 10:56 PM EST

Name: "No Flea Party"
Home Page: http://accountants.infortworthtxlocalarea.com

The problem with S.S. is this, since there is no trust fund (like congress was supposed to do) it is funded with direct tax payment seach year.  With the baby boom generation getting to retirement age, we are going to have less and less workers paying into S.S., there will be less money coming in to pay more recipents.  So forget the deficit issue in regardes to debt, it is a deficit issure in regards to incoming taxes in relation to increasing outflows.  Bottom line is, if you're under 40, you'd better not count on S.S.  Cause if they jack up taxes on it for those in the working class to pay for it, you'll get a revolt that makes what the Flea Party is doing in parks right now look like childs play.

Thursday, February 23, 2012 - 10:34 PM EST

Name: "anonymous"

Sigh...

 

Wrong.  There is a Trust Fund.  It is invested in US Tresury Bonds.  It owns about 2.5 Trillion Dollars woth of them.  Also Secial Security is still taking in more from the tax than it is paying out and still purchasing US Bonds...really the people who want th believe that the Conservatives are more correct should at least get thier facts correct and then argue about something real...

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