Social Security

SOCIAL SECURITY:

Treating Symptoms

Or

Curing Patients

Imagine a woman feeling pain and discomfort in her throat. She goes to her local doctor, who upon examination discovers an unusual lump in her throat. That doctor refers her to a specialist, who performs a biopsy on the lump. The resulting test shows the lump to be malignant. Upon relating the test results to the patient, the specialist then advises the woman to take two Tylenol™ and spray Chloraseptic™ on her throat to ease any discomfort she feels when she tries to swallow. This ends the treatment of the patient.

In this scenario, no reasonable person would agree that the treatment of the woman’s condition was appropriate. In fact, the vast majority of reasonable people – including those who believe society has become too litigious – would probably agree that the woman should immediately file a malpractice suit against the specialist and seek to have that quack’s license revoked, if only to prevent that specialist from doing any harm to other patients.

The reason? It is obvious in the above scenario that the doctor incorrectly treated the patient’s symptoms instead of the cause of the symptoms. Moreover, this mistake was especially egregious since the specialist knew the cause of the symptoms, yet ignored the cause and treated only the symptoms. Which brings up the topic of Social Security.

The current system under which Social Security and Medicare (OASDHI) is funded has been the subject of great controversy over the past few years. However, like the specialist above, the vast majority of politicians – both Democrat and Republican – in Washington only seem interested in treating the symptoms, all the while ignoring the cause of those symptoms. Why would they knowingly do that? Don’t our representatives want to do what’s best for our country now and in the future? What is the controversy surrounding Social Security and Medicare? What are some of the ways politicians are proposing to treat the symptoms? Before answering these and other questions, it is important to take a brief look at the history of Social Security, including its rationale for creation and the political and social climate in which this redistribution of wealth began. For if a correct understanding of the problems involving today’s Social Security program is to be obtained, at least a minimal understanding of the history of the program is required.

Social Security: A Brief History

The Great Depression began on Black Tuesday, October 29, 1929, under the presidency of Herbert Hoover. Hoover, a Republican, followed President Calvin Coolidge, who believed that government worked best when it didn’t interfere in people’s lives. Therefore, many historians rate Mr. Coolidge as a poor president because of the lack of initiatives taken by his administration .

In contrast to Mr. Coolidge, Mr. Hoover tried to institute programs to revive the country out of the Great Depression, with the result being that each initiative seemed to only sink the country in deeper. To illustrate how disgusted the populace was with Mr. Hoover’s administration, one only need look at the makeup of Congress during his presidency. Following Mr. Hoover’s election in 1928, the Republicans controlled both houses of Congress, with a 17-seat lead in the Senate and a 100-seat lead in the House. Four years later, when Mr. Roosevelt was elected, the Democrats held a 25-seat edge in the Senate and a 193-seat edge in the House, giving them gains of 42 and 293 seats, respectively, in a four-year span.

It is of no surprise, then, to realize that Mr. Roosevelt and his party believed they had a mandate from the American people to “fix” the Great Depression. Mr. Roosevelt’s major theme during the 1932 campaign was for a “new deal for the American people.” And so, beginning in 1933, the Democrat-controlled Congress began passing an astonishing number of pieces of legislation, creating numerous federal programs, which Mr. Roosevelt dutifully signed into law.

However, the Supreme Court would not cooperate, striking down law after law and program after program as being unconstitutional (and rightly so). Since the Constitution does not explicitly name the number of judges to serve on the Supreme Court, Mr. Roosevelt threatened (with the help of the Senate) to add enough new judges to the Court to give him a majority that would approve of his laws. The Social Security Act cases were one set of cases involving the New Deal that the Supreme Court “allowed” as constitutional as a result of Mr. Roosevelt’s threats.

The Rationale for Social Security

During the years of the Great Depression, the poverty rate for senior citizens exceeded 50%. Coupled with the industrialization of America, which led to many seniors supporting themselves, there was a significant portion of older people in society with no money and no means of self-support. The concept of this type of social welfare was to create a system of old-age benefits for workers and their families. Initially the program was designed for only elderly workers (only the primary worker…not dependents). In future years, the act would be amended several times, including the addition of coverage for those disabled (1956), survivors and hospital insurance (1965), as well as many times for amendments to Medicare and restructuring of funding for the program. In short, the program was designed as a “safety net” for the poor and downtrodden in our country during a time of great poverty.

The Problem of Social Security

The major problem of the Social Security system is that it was set up as a “pay-as-you-go system.” In other words, current workers aren’t paying Social Security and Medicare taxes for their own retirement, but rather their contributions are being used to send money to current retirees. The system was set up this way because a) if a worker had to pay into an individual account for his own retirement, there would have been no money to send to current seniors, which wouldn’t have solved the problem of so many seniors being unable to care for themselves and b) the system was designed as a “safety net.” However,