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FDRs Social Security Paradox By Jim Powell, April 30, 2009 If Social Security is so wonderful, why were people

forced to participate, why was it set up as a monopoly, and why did it dump ever-larger costs onto the backs of future generations? There never was a popular demand for Social Security, even during the Great Depression. Few Americans were interested in the kind of government-run program that the German politician Otto von Bismarck had introduced in Europe. According to Social Security expert Carolyn Weaver, author of The Crisis in Social Security, in 1929 about 95 percent of senior citizens were self-supporting an increasing number had private pension plans or annuities. Many seniors were helped out by family and friends. Despite the shock of the Great Depression, private pension plans continued to perform well. Industrial pension plans not only grew steadily, Weaver reports, but also proved quite resilient, with certain features improving markedly.... The rate of failure for existing plans, moreover, was relatively modest. Of the systems operating in 1929, those that were discontinued, closed to new employees, or suspended by 1932 [a low point in the Depression] involved less than 3 percent of all covered employees. People lost pension coverage primarily because they lost their jobs a consequence of misguided government policies that brought on the Great Depression and prolonged it. By 1935, President Franklin Roosevelt embraced the German idea that there should be government-run social insurance. That wasnt legitimate insurance, where participants have a contract, they pay premiums based on their life expectancy, the premiums are used to make productive investments that will cover the benefits and the participants and their heirs have a property right to receive benefits that have been paid for. As the Supreme Court later affirmed in Flemming v. Nestor (1960), nobody has a contractual right to receive specific Social Security benefits Congress can change benefit formulas at any time. Nobody has a right to pass on Social Security benefits to heirs, as is done routinely with private annuities, pensions, and life insurance. Perhaps because Social Security promoters didnt have much confidence in it, they insisted that it must be compulsory. It was funded by collecting an excise tax on payrolls initially, 1 percent from an employee and 1 percent from his employer. In fact, both portions of the Social Security tax came out of the employees pocket, since they were part of total labor cost. Instead of going to an employee as additional wages, the the employers portion went to the government. There was considerable opposition to the proposed Social Security Act from both Democrats and Republicans. Sen. Bennett Clark of Montana proposed an amendment that would have enabled employers to opt out of Social Security if they had pension plans offering more generous benefits than Social Security. That would have meant freedom of choice for employers and employees alike, but advocates of Social Security were adamantly against freedom of choice. Social Security promoters must have feared that private retirement plans would offer a better deal. Wisconsins progressive Democratic senator, Robert M. LaFollette, fumed that the Clark

amendment would be inviting and encouraging competition with its own plan which ultimately would undermine and destroy it. Roosevelt threatened to veto the Social Security bill if it had the Clark amendment. Freedom of choice was eliminated during the House-House conference, and Roosevelt signed the Social Security law on August 14, 1935. In case anyone doubted that Social Security was a monopoly, employers across America were required to display this notice: Beginning January 1, 1937, your employer will be compelled by law to deduct a certain amount from your wages every payday. This is in compliance with the terms of the Social Security Act signed by President Franklin Delano Roosevelt. This is NOT a voluntary plan. Originally, the idea was to have Social Security taxes accumulate in a fund from which at least some benefits would be paid. But incredibly, Social Security promoters were concerned that politicians would loot the fund. For instance, Abraham Epstein, who had led the lobbying effort for a government-run program, wrote in Nation magazine, Experience everywhere indicates that politicians will hardly be able to keep their hands off such easy money. Accordingly, in 1939 Roosevelt turned Social Security into a pay-as-you-go system where current taxpayers funded the benefits of current retirees, and nothing was set aside to help take care of current taxpayers when they retire. Roosevelt knew what he was doing. Edwin E. Witte, a University of Wisconsin economist whom he appointed to develop the original Social Security plan, warned that Social Security created unfunded liabilities upon which future generations will have to pay large amounts annually. Witte got that right tens of trillions! **************************** A Blog Post: Old News from back in the good old days: GAO estimates unfunded federal entitlement liabilities at $53 trillion Presentation by the Honorable David M. Walker Comptroller General of the United States A Call for Stewardship The National Press Club - Washington, D.C. December 17, 2007 United States Government Accountability Office - GAO-08-371CG In a speech to the National Press Club, Comptroller General David Walker noted the release of the 2007 Financial Report of the United States Government and described the estimate that the federal government's total liabilities and unfunded commitments for future benefits payments promised under the current Social Security and Medicare programs are now estimated at $53 trillion, in current dollar terms, up from about $20 trillion in 2000. This translates into a de facto mortgage of about $455,000 for every American household and there's no house to back this mortgage, Walker said. The Medicare program represents $34 trillion of the fiscal gap, with the prescription drug benefit along equaling about $8 trillion of the $34 trillion Medicare total. Generations of Americans will be paying the price with compound interest for this new entitlement benefit, Walker noted. In other words, Walker said, our government has made a whole lot of promises that, in the long run, it cannot possibly keep without huge tax increases. ------------------------------

What do you suppose it is in the current year (2011) as it comes to a close. ENTITLEMENTS. Nothing else.

This is

The US checking account is worse than empty, it is vastly overdrawn. Even though the sick liberal thieves have more blank checks, the money is gone! It went to all of the past entitlements to all those poor disenfranchised victims of social injustice that liberals see around every corner. Unfunded federal ENTITLEMENT liabilities at $112 trillion click on debt clock This is the ENTITLEMENTS ONLY! That is the phony liberal morality for you. Steal from the children not yet born. Does anyone really think that those future generations will be able to pay this back, or will they have to live like our current third world poor, not enough strength to brush the flies off their faces? After what our forefathers worked so hard for, and built, that will be the future of American citizens because of the cowardly liberal thieves who could never have enough, for them and their phony victims! All it took was just a few selfish generations. ****************** A blog Post: Cloward-Piven Strategy. In order to understand why things are the way they are you need to understand why "entitlements" have gone rocketing through the roof breaking the government in the process. This is no accident. Saddling the government with obligations it can't pay is a deliberate political act of the Progressive Left to create dependency, fiscal insolvency and the chaos of a collapsed government that falls into the hands of the Globalists. End result? The former United States a mere province in the Marxist/Socialist New World Order governed by the UN. Everyone needs to learn about Cloward-Piven and they need to learn about it NOW. Let the "dictatorscons" scream hurl insults and threats and stamp their feet in rage, visit and read, read, read. In the process you will learn about the REAL intent of organizations like ACORN and their adherents like Barack Obama and his cadre of Marxists. This is NO joke and the condition of our economy is NO accident. ------------------Cloward-Piven Government - By James Simpson The strategy of forcing political change through orchestrated crisis. The "Cloward-Piven Strategy" seeks to hasten the fall of capitalism by overloading the government bureaucracy with a flood of impossible demands, thus pushing society into crisis and economic collapse.