Social Security - Insurance Against Poverty
"They want the federal government controlling Social Security like it's
some kind of federal program." George W. Bush ~ St. Charles, MO., Nov.
What a strange time to want to try to dismantle the Social Security program.
When Franklin Delano Roosevelt signed the Social Security Plan into law in 1935, it lifted millions out of devastating poverty. The stock market had crashed, people rushed to withdraw savings from banks causing them to collapse, companies closed displacing workers and leaving them unable to find new jobs, pensions were gone, and savings wiped out. The interconnectedness of our economic survival caused a downward spiral. With factories closed, there were no goods for stores to sell and with people having no jobs there was no money to purchase the goods still available. Farmers suffered because they couldn't sell what they produced and without the money from that sale they couldn't afford to buy the seeds for next season's crop or buy feed for livestock. Farms and homes were foreclosed and millions of hard working Americans across our nation suddenly found themselves without jobs, without homes, without food, without money, without prospects and without hope.
That picture of America should not have been forgotten so easily. It is within the memories of some of our citizens who lived through that time. Others have surely heard the stories from parents or grandparents. Books and movies depicted the hardship and despair. Most of us have seen pictures of the gaunt, bewildered faces of displaced, desperate people trying to survive.
Roosevelt's solution of an insurance plan to protect Americans against the hazards of economic disaster through no fault of their own, has served our people well for 70 years. The guaranteed income provided by that insurance, paid for by contributions during a person's years of employment, has given at least some measure of financial stability, independence and dignity to millions of American retirees.
Social Security is the most stable program in government. It isn't broken, so why the president is so determined to fix it is puzzling. George Bush's plan is to have some of the money normally contributed to the insurance fund held back and put into private stock market accounts. Presently, the contributions of the generations presently working and those moving into the work force pay for the benefits of those retiring from the work force. The benefits for each succeeding generation are paid for by those below them. If the contributions are decreased, the system cannot be sustained without a decrease in the benefits. It's a simple enough concept. If less goes in, there's less there to be given out.
The important feature in Social Security is that it provides a guaranteed income. It is insurance against poverty. It works like any other insurance where claims are paid for out of the pool of premiums paid by other insured people.
No one can predict the future, but much can be deduced from studying the past. In the recent past we have seen large corporations like Enron go bankrupt and thousands lose their jobs, insurance and pensions, their savings used up for living expenses while looking for new jobs. More workers have lost jobs and pensions from companies that have relocated whole operations overseas or outsourced some of the work that had previously been done by American workers.
We have seen an increase in the number of families falling below poverty level. We have seen our national debt increase and the value of our dollar decrease. The number of homeless is increasing, particularly families. In 2003, 40 million people were hungry. We've seen the stock market rise, but just as frequently, we've seen it fall.
Today's economic ills are nowhere near those seen in the Great Depression, but Bush's plan of privatization will add another $2 trillion to our national debt for the transition and cost each account a broker's fee. More importantly it will reduce and eventually eliminate the guaranteed income from the insurance benefits that currently keep our nation's retirees from poverty.
While eventual adjustments will have to be made due to retiring baby boomers, the fund is able to sustain itself for at least the next 40 years. Bush says he doesn't want to leave if for future administrations to deal with. Why is it that he doesn't mind leaving future administrations an enormous national debt to deal with?
Whatever success or failure any other investments have, social security is there to guarantee that pictures of gaunt, bewildered faces of displaced, desperate people trying to survive, looking back from the pages of a book at future generations, don't belong to us.