Wednesday, May 30, 2012

Let's Fix Social Security Once and For All by J.J. Burkard

Once upon a time way back in history, 1935 to be exact, our then United States President Franklin Delano Roosevelt signed into law a dramatic bill which would be a departure from all the legislation previously passed by Congress. It was called, Social Security….

    While it embraced the word social. It was not really that at all. It was not the USA embarking on Socialism as compared to Democracy, no, this was a well thought out plan to lessen the impact of old  age, and unemployment on Americas Senior citizens. And while President Franklin D. signed the bill into law,  everyone in Washington and in the political circles new in their hearts this was the brainchild of Mrs. Eleanor Roosevelt, Franklins  wife. This was a pay as you go plan, sensibly worked out, that meant at retirement age, a working man or woman could look forward to a little compensation check each month to help ward off poverty and other painful results of growing old without a job or any means of income…..Also included in this plan was provisions to assist those who through no fault of their own found themselves unemployed.

    Though the monetary compensation was relatively small, it was the beginning of the largest social assistance program in the world. Today, no other nation comes close to presenting such a massive insurance protection program for their citizens as our  United States Social Security System…..
   Social Security was a smart move, thanks to Eleanor Roosevelt and her sympathy towards the American working men and woman she observed during , and after the stock market crash of 1929, which changed the lives of every man, woman and child in our country..

   Just for comparison purposes, almost at the same time as this retirement program was taking affect, the U.S. Government felt obligated to offer federal employees a similar package. Since federal employees were not covered by Social Security, this only seemed sensible. So, the Civil Service Retirement System was formed. This also was exclusively retirement and has never changed since it first began paying out benefits.

   Both systems flourished over the years building up reserves at an astonishingly rapid rate. However in the late 1950’s this would soon change. At the time period mentioned, the SS System had so much money in reserves, it was literally coming out the cracks between the doors and windows. It wasn’t long before our observant and ever alert politicians realized they had a potential ticket to their own as well as their parties re-election guarantee at least for the next twenty or thirty years before the bubble would burst.
It was in late 1955 or so when Washington began sending out trial balloons across the country about the taxpayers opinion and reaction if this money was used for other social benefits. After sugar coating the bitter pills such as raising the SS  payroll deductions, or reducing the benefits distributed, or even extending the potential retirement age, they were able to convince John Q Public that this was the correct thing to do. After all, what good is money if we don’t spend it?  And spend it they did…….

   So many programs were added to the Social Security System, it is hard to keep track. So many, that one wonders how long will this last? When will the cash cow stop giving. Well, wonder no more!. It has stopped. Now, politicians and very sincere politicians are trying to devise a way to stop the bleeding, to keep SS solvent.

   But what are the plans? Raise the retirement age? reduce the benefits? eliminate some programs? Increase the contributions?  Always whenever cutting is necessary, the first place our elected representatives seek is the easy way out. Easy because the taxpayers are in no position to argue, they have reps in Washington, but when the reps in Washington are against the taxpayer who elected them, how can you possibly win with the odds stacked against you like that?
     Logically, we need a solution. But are we really going about it in the right way? If it was my call, a system so big and in so much trouble is just screaming to be disassembled. That’s right, break it up. Separate the retirement aspect of Social Security from the other unrelated charitable expenses that have nothing to do with retirement. Raise the deduction per person if necessary. In 2011 the employee was paying 4.2 % out of his/her earnings. The employer was hit with a whopping 6.2 % per employee. Surely this amount will more than cover the retirement/unemployment system as envisioned by Franklin and Eleanor back in 1935. And how about the rest of the important programs that had been added on over the years. Well, everyone is talking about taxing the rich. Here’s a painless way of doing just that.

     Did you know that people who pay social security  are taxed up to 106,800 dollars of their earnings. After that amount is reached they are not subject to further deductions. Why not?  Here’s a way to tax the so called rich without cheating them. They are entitled to collect the retirement benefits just like the lower paid workers. So we should really increase this ceiling or better yet, do away with it altogether. Adjustments can be made to compensate them for their extra contributions…..
Oh, I mentioned for comparison purposes the other federal retirement system. It has never been dipped into, but remains exclusively for retirement. It is one hundred percent solvent. A few years back if you recall, there was talk about joining both systems together to resolve the social security problem, This would have been another catastrophe, and it was voted down. Maybe it was the financially intact system was ALSO BENEFITING our  distinguished Lawmakers     

  I’m no expert on these matters, and I don’t pretend to be. But if something radically new isn’t proposed and soon there may never be a solution. To do nothing is not the answer. Unfortunately, so far that’s been the only action in Washington.

   One thing is certain, if nothing is done, the entire system will collapse and every single person relying on it will be hurting. For once, let’s think about the little guy and gal with their kids who will have nothing to look forward to if something isn’t fixed very soon…..

John Burkard is a contributing writer for several years with as well as the Mimi Speaks Blogspot. Enjoy.