Email L. Henry Platt, Jr.
SOCIAL SECURITY: A SOCIAL PROGRAM
SOCIAL SECURITY is not a true insurance; it was just presented that way to get it established. In truth it is a social program designed to provide a minimal income for older Americans when they have retired. The first person to receive Social Security benefits back in 1937 probably received more than she put in in the first two monthly checks. However, using the 15.3% figure, a person earning $50,000 annually today is paying more than half of what he would receive if he retired tomorrow! However, most people are not self-employed so most of these contributors will have a more favorable cost/benefit ratio.
LET'S BE HONEST! Social Security was never intended to provide for everyone to live in the lap of luxury! It was meant to allow senior citizens to continue to live in their own homes or apartments instead of the alms houses so well known at the end of the nineteenth century and even continuing into the early twentieth century. This was also to allow seniors an income so they would not be wholly dependent upon their children.
In the early 1960's Social Security was extended to provide income for those who could not work for extended periods (over six months) because of injury or illness. Today more money is paid to these "disabled" beneficiaries than to the "old age" recipients. Moreover, the "disabled" people paid into the system far fewer years than the "seniors". If a "disabled" person paid into the Social Security system for fifteen years before beginning to receive benefits, it is easy to guestimate that the cost/benefit ratio will vastly exceed any investment you're likely to find (except perhaps the occasional cattle futures contract you might be lucky enough to hear about in Arkansas).
Now, let's look at this 15.3%! First, 2.9% (points) are for Medicare. Half of the tax is paid by the employer, so the employee actually pays only 6.2% into Social Security. Far more than half of this goes for "disability benefits" so the remainder still looks good. Critics cite low returns on U.S. Bonds (and then they subtract inflation from the rate) as an incentive to allow wealthy people to invest their social Security in the Private Sector, but I never even tried to say that wealthy people couldn't get a better return on their retirement savings outside the Social Security System.
Let's be honest! Social Security is a social program of taxes and benefits which benefit all of the participants. As with all social programs, the rich pay more, and the peons get more (compared to what they contributed). In the United States those of us who have prospered should continue to shoulder the responsibility and contribute to the common weal in greater abundance than those whose success has been minimal.
All Americans are invited and encouraged to provide for a more prosperous retirement through systematic savings. For most Americans there are tax incentive programs: I.R.A., Keough, 401 K, etc. I firmly believe that we should not decimate the current Social Security System to provide for those who have already reaped a good harvest. They already will receive benefits sufficient for a reasonably comfortable life -- just not in the ultra high rent districts.
For further details on these ideas, please, feel free to contact me at (e-mail) email@example.com
© L. Henry Platt, Jr.