Failures and successes of Social Security act?
What were the successes and failures of the social security act, please provide sources.
- 8 years agoFavorite Answer
First, you have to look at the history of the system because the intent of the original law was changed in 1942. FDR wanted a self-funded contributory benefits system. He wanted beneficiaries to have a 'legal, moral, and political' right to benefits. The original law called for 6% payroll taxes to be phased in. In 1942 Congress waived the increase over FDR's veto. In fact Congress changed the system from a 'self-funded' to a paygo system.
Once it was paygo, Congress went bananas on benefits. A retiree couple in 1960 expected to collect $7 of benefits for every $1 contributed. Given that you can't sell dollars for dimes, Social Security reached insolvency in 1983.
In 1983 Congress retrieve Social Security from insolvency with massive tax increases and benefit cuts. These changes primarily fell on people who were non-voters at the time. The benefits of retirees were perserved. Tax increases were phased-in. So the majority of voting aged Americans were not as affected as future generations.
Today the system has a 20.5 trillion dollar shortfall. (Page 15 of the Trustees Report). Poverty in the 35 and under set is at historic highs. The system - now the largest expense in retirement planning - delivers a negative return. The high cost of payroll taxes have made saving for retirement much harder, as baby boomers approach retirement a record percentage of people call Social Security critical.
The document that you should look at is the Congressional testimony of AJ Altmeyer in Nov 1944 to the Ways and Means Committee. He was the head of Social Security in 1944, and testified that waiving the automatic increases in payroll taxes prescribed under the original law was dangerous. He in that testimony predicts everything above. Maybe he was a wacko, but he was the head of Social Security in 1944.
I generally use source material from the Social Security Administration. Feel free to email me here or at Joe@fixssnow.org if you question the source of any statement.
- Anonymous5 years ago
Safe since 911 no news source needed. Lets see if we can say they same thing for the next 7 years