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View Full Version : Good Morning...OUr annual tribute to the Social Security System



Okla-homey
8/14/2007, 05:38 AM
August 14, 1935 Social Security Act Passed

http://img132.imageshack.us/img132/4025/fdrvalid7lq.jpg
President Roosevelt signing Social Security Act of 1935 in the Cabinet Room of the White House. Also shown, left to right: Rep. Robert Doughton (D-NC); Sen. Robert Wagner (D-NY); Rep. John Dingell, Sr. (D-MI); Unknown man in bowtie; Secretary of Labor, Frances Perkins; Senator Pat Harrison (D-MS); Congressman David L. Lewis (D-MD). Library of Congress photo, LC-US262-123278.

72 years ago today, President Franklin Roosevelt signed into law the Social Security Act. While the Act became law in 1935, the roots of the legislation can be traced back to the crash of 1929.

No one was particularly well prepared for the ensuing Depression, including the elderly. Government surveys taken during 1934 estimated that more than half of the nation's elderly lacked the means to support themselves. Clearly. they believed, the country needed some sort of system for providing for its aging citizens.

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Gov't produced poster widely distributed to inform folks about the new government program

Various pension schemes were hatched, including State-run pension programs, while America's leftist leaders marshaled surprising support for their economic proposals. But, as the 1930's chugged along, the nation was still in need of a pension program. "New Deal"-ing U.S. President Franklin D. Roosevelt finally pushed a proposal through the Congress.

http://aycu37.webshots.com/image/23196/2003913903187506203_rs.jpg (http://allyoucanupload.webshots.com/v/2003913903187506203)

Compared to some of the other solutions developed at the time, the Social Security Act was relatively moderate: the bill mandated the now familiar "contributory system" in which workers forked over part of their salaries to a joint pension fund. As you'll see below, it was, and is, really a tax versus a contribution though.

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Another gov't poster

Shortly after the passage of the bill, the government wheeled into action, creating an elaborate system for collecting, collating and doling-out pensions. By January of 1937, the Social Security program was open for business. Over the years, Americans have socked away over $4.5 trillion in the fund, while more than $4.1 trillion worth of benefits have been paid out to the nation's retired citizens.

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Yet another poster

The main thing that has changed since the concept's inception, is for years, people have been able to "draw" more than they themselves ever contributed -- sometimes a lot more. The system relies on the contributions (or taxes) of others who have not yet reached retirement age and begun to collect to cover the difference.

The future of Social Security...

Is uncertain. Opinions vary, but some eminent and esteemed experts would have us believe the current scheme simply isn't going to work for much longer as the monthly demand begins to exceed the fund's income. Most agree, that at some point in the future, that defecit will require a) a cut in benefits, b) an increase in the Social Security tax, or c) both.

http://img132.imageshack.us/img132/3940/socialinsecurity0ko.jpg

One thing's for sure, as held by the US Supreme Court in 1958 in the landmark case, Fleming v. Nestor, Justice Harlan wrote in the majority opinion:
To engraft upon the Social Security system a concept of "accrued property rights" would deprive it of the flexibility and boldness in adjustment to ever-changing conditions which it demands. It was doubtless out of an awareness of the need for such flexibility that Congress included in the original Act, and has since retained, a clause expressly reserving to it "[t]he right to alter, amend, or repeal any provision of the Act...

We must conclude that a person covered by the Act has not such a right in benefit payments as would make every defeasance of "accrued" interests violative of the Due Process Clause of the Fifth Amendment. (boldness added)

Not to get all political, but merely to state facts, put another way, just because you "put money in," it doesn't necessarily follow that you'll get money back someday. Social Security has no contract with you or anyone else. It is not insurance. The original money-back guarantee had been removed in 1939. And the benefit cuts enacted in 1983 (gradually raised retirement age, benefit taxation, gradual cuts in the early retirement benefit) are further proof that one in fact has no real property rights.

Furthermore, if you retained any property interest in what you put in, you would be able to leave that cash to your family as part of your estate. That, you cannot do.

On the upside, if you croak before retirement age and leave minor children, they generally get to draw some of your benefit until they hit 18 or graduate from college.

http://img132.imageshack.us/img132/7282/pen2bb.jpg

As an aside, if you believe the plan needs an overhaul, get smart on the issue, then let your congresspeople know you want action. It just might help. Afterall, whether you're Dem or GOP, that is the American way...but don't hold your breath. Until the gall-danged AARP changes its position, we are unlikey to have change because they have frightened papaw and meemaw who refuse to abide tinkering with the program.

http://aycu13.webshots.com/image/23372/2003913389580928197_rs.jpg (http://allyoucanupload.webshots.com/v/2003913389580928197)

For an interesting comparison of old age pension programs around the world, go here:
http://www.washingtonpost.com/wp-srv/business/daily/graphics/pensions_041105.gif

http://img216.imageshack.us/img216/7977/insane7zogw8.jpg

SoonerStormchaser
8/14/2007, 06:05 AM
Thanks for reminding me that I'm not going to ever see a check like that.

Btw...if it's ok with you, I want to do the GM thread tomorrow.

swardboy
8/14/2007, 07:38 AM
Meanwhile, $1,000 invested one time in 1957 with Warren Buffet would yield $27,000,000 today. It's really sad that congress wouldn't work with GW's proposal to tie S.S. to the stock market.

sooner_born_1960
8/14/2007, 08:08 AM
George Washington made no such proposal.