With the Great Depression, poverty among the elderly was substantial. The concept of Social Security was designed to address the problem of economic security for seniors by establishing a system by which workers contributed to their own future retirement by making payments to a fund while they worked.
The Social Security Act was signed into law by President Franklin D. Roosevelt in 1935 in response to the Depression as an alternative to reliance on welfare. This act created a social insurance program designed to pay retired workers age 65 or older a continuing income after retirement.
Benefits were to be based on payroll tax contributions that workers made during their working lives. Special trust funds were created for these revenues, and benefits then were paid from the money in the Social Security trust funds.
Since 1937, according to the Social Security Administration, the fund has taken in $13.8 trillion and paid out $11.3 trillion. The loans made by the U.S. government from Social Security are of the “special obligation” type and have priority over other government debts. The trust funds have earned interest every year since the program began. As you can see, the program is solvent.
The problem comes from the federal government borrowing from the Social Security fund to cover debts caused by government spending that the Fed is having a hard time paying back. Because the fund is a “special obligation,” the government now is calling Social Security an entitlement, which it isn’t. Seniors are not “entitled.” The fund is full of our seniors’ money, and does not belong to the government. The government is a debtor.
A Social Security check now is called a “federal benefit payment” (SSA 2013 budget justification). This is our socialist government trying to take over Social Security and make it a part of the general fund, which would give the feds complete control of money that belongs to our seniors.
Because the government is borrowing from future generations to meet its obligations today, it has created a Ponzi scheme, which will collapse on itself because there will be fewer people paying taxes than the government needs to pay Social Security back the money that the government borrowed. Instead of giving billions to foreign countries, why doesn’t the government pay back its seniors?
Social Security trustee reports state that the funds would become exhausted between 2036 and 2041. Therefore, to protect future retirees, we must make changes, such as raising the taxable amount to 90 percent of wages, increasing the FICA percentage or moving the retirement age to older than 70. On average, we are living longer than when Social Security was started.
I also support the mandatory offering of a new Social Security IRA to anyone who would be affected by the change in age. According to an article on amac.us, the SS IRA would be tax-deductible, payroll-deducted and put into an individual IRA owned by the wage earner. The funds invested would not be accessible until either age 62 or 65. It could be started with as little as $5 per week and be put into a plan offered by the same companies that presently offer IRAs and 401ks.
If we do not get the national debt under control, the government will default on its loan and destroy the economic safety of our seniors.
Calderone is a conservative who lives in Midway. He is a professional salesperson and has written articles for trade publications in various fields for 30 years.