POKING the dragon

[detbuch]

Originally Posted by Karl F

we was warned

What FDR warned against is today's Social Security system. He envisioned a pre-funded "insurance" system of compulsory contributions into a social insurance annuity for WORKERS to be used as a supplement to their own privately invested retirement plans. What developed in the 1940's was a shift, against his will, to a pay-as-you-go system that also progressively expanded to cover all sorts of beneficiaries other than contributing "workers." It is now just another compulsory regressive payroll tax that goes into the general fund and helps to pay all the Federal Government obligations.

It was known as far back as 1935, before the Social Security Act was passed, in the January 1935 report of the committee on economic security that "with an increasing number and even more rapidly increasing percentage of the aged, the cost of supporting old persons will be a heavy load on future generations . . ." and this was before modern medecine increased life span and before so many other then retirees were added to the S.S. rolls.

Arthur Altmeyer said in 1944 " it is a mathematical certainty that the longer the present day pay-roll tax rate remains in effect, the higher the future pay-roll tax must be . . . will eventually necessitate raising the employees contribution rate later to a point where future beneficiaries will be obliged to pay more for their benefits than if they obtained this insurance from a private insurance company." And also "retaining the present rate creates a moral obligation on the part of Congess to provide a government subsidy . . . to avoid levying inequitably high pay-roll tax rates . .. . this is recognized in the Murray ammendment . . . to the Social Security Act . . . [in wich] there is . . . to be appropriated to the trust fund . . . sums as may be required to finance the benefits . . ." Altmeyer was a student of one of the founders of the Wisconsin model of social insurance which was the model for FDR's plan.

So FDR might have been warning about Republicans of his time, but not todays Republicans who want a partial or complete reform of Social Security that would privatize it to resemble more closely his vision than the system that exists.