Cigarettes use to be the old equalizer. You paid into Social Security and at the same time, were taxed on every pack and died before retirement. This was the FDR plan. The planned retirement back then at age 65 sounded great. Most people didn’t live long enough to get that old, but it was a benefit worth contributing towards. It was tax dollars coming in and virtually nothing going out. Democrats view this from a historical point of view and remind everyone that FDR changed the way we look at retirement. In reality, it was a lottery ticket that had a very slim payoff. It brought in revenue.
Kaiser Wilhelm II back in the 1889 offered the first government retirement plan. Retirement benefits were to be paid at age 70; average life expectancy was age 45. So the first attempt at a retirement plan was very well thought out as to the future entitlements to be paid out.
When FDR was president, there was no real income tax. Our government raised revenues from import duties, liquor and tobacco taxes etc. Social Security was a successful attempt to register workers and tax them. FDR gets credit for the benefits we pay out today. His actual plan was to raise revenue by taxing labor. How was he to know, that people would start to live longer, it had never happened before.
At the end of WWII, we now had penicillin and other miracle drugs. The retirement laws didn’t change, but the length of life changed. All of a sudden entitlement got a tad bigger. From there more and more got added on to the benefits. Government entitlements in FDR’s time were about zero, today they are about 60 percent of the declared budget.
Then we went to Medicare in1965. The quadruple bypass, Knee and hip replacements and kidney transplants were not even thought of. Modern medical science took huge leaps. Now Congress has passed health care. The question arises, who is stupid enough to believe that we can pay the bill as a country?
The US can reasonably afford to start retirement benefits at age 75. And probably be able to come up with $5,000 per year in Medicare payments for ages 65 on up. Reality has to set in or we will be taught a very severe lesson. There is no free lunch, the elderly will expect the government to fulfill their desires at the expense of the young taxpayers as promised . Of course we all get old so it equals out doesn’t it? We will all eventually get to feed at the trough, won’t we?
Yesterday Social Security announced that the fund will pay out more this year than it takes in. Last year, it was stated that this present condition would not occur until 2016. Hmmmm.
This was part of their news bite:
Its so-called balance is, in fact, a history of its vast cash flows: the sum of all of its revenue in the past, minus all of its outlays. The balance is currently about $2.5 trillion because after the early 1980s the program had surplus revenue, year after year.Congress spent that money and gave the Social Security people an IOU certificate. Bernie Madoff was doing OK until people wanted cash, he didn’t have it, he had spent it--our government is in the same boat. Think I am kidding? Here is a link Link A hat tip to Cancel our Debt Blog
We have proof that the money was collected and proof that it was borrowed and spent by Congress. Plus we have a bunch of Social Security employees that claim the fund has money; "We have all of these Treasury certificates-------------" (God help us!)
Our new health care entitlements program could consist of one pack of Roll-aids and a tube of Preparation H. The thing that irritates me, is that we might have to wait in line to get it.