Bring It On!

Defining Social Security

December 4th, 2006 | by Ken Grandlund |

(Originally posted on Common Sense in May 2005, this is the first of a four part series on Social Security. Although the president is no longer kicking the SS can around, the topic of our Social Security program still presents a crucial problem for our nation’s finances in the coming future. And while I doubt that the new Congress will have address this looming problem, that doesn’t mean they shouldn’t.-KG)

Social Security is really a widely encompassing description for a variety of government assistance programs including Medicare, Medicaid, disability benefits and retirement programs, to name the most common. Social Security programs, specifically the retirement program, have long been considered a perilous “third rail” for politicians, meaning that if you tamper with the existing program you will get stung badly, and if you attempt to reform the existing program you may well die, politically that is. As a result, the retirement element of social security has been on virtual cruise control, occasionally modified to accommodate changing dollar values, but on the whole remaining in its original form. Recently, this element of Social Security has been brought under the full glare of the spotlight as the current President has made this one of his “hills to die on.” Everyone has finally admitted that the current system can’t sustain itself in its current form indefinitely, and though predictions of its insolvency vary, they come to the same conclusion: something must be done.

It would seem to me though, that before we try to fix what will soon be broken, we should make use of this opportunity to reexamine not just the structure of our program, but our underlying reasons for having the program at all. What purpose does social security play in our society, beyond redistributing money from the working class to the retired class with the promise that today’s working class will be replaced by a future working class that will fund their retirement? Or does it represent some other values we hold? An honest answer to these questions should be essential in order to shape lasting reform, for each may necessitate completely different plans. And lasting reform should be the key, so whatever plan arises should remain flexible enough to accommodate changing future demographics and attitudes towards national retirement programs.

Why do we even have a social security retirement system? The original reason for creating a national retirement program was simple- that generation of Americans decided that no citizen should have to continue to labor day after day to make ends meet after reaching a certain age. And further, that no citizen who had spent their productive adult years working as a member of society should have to worry about starvation or poverty once they became too old to work. The former is a tribute to our elders, a thank you for years of service and a chance to enjoy ones later years free from the daily grind of making ends meet. The latter is a security blanket for ourselves, ensuring that even if things go bad, we will always have something to fall back on. At the programs inception, many millions had lost their life savings, their jobs, their homes, or all three in the Great Depression. A nation that had enjoyed decades of progression towards a modern society was suddenly plunged backwards leaving whole areas in abject poverty. At that time, families and neighbors had to depend upon each other for survival, sharing the resources they could get, passing along clothes and furniture and the like, and dividing up the bread so that everyone got at least a little bit each time. Social Security became an extension of this attitude where everyone helped everyone else just a little bit so that no person went without at least the basics of life.

So if Social Security was designed to keep those at the bottom from falling through the cracks, how did it become the massive behemoth of entitlement that it is today? Was social security ever meant to be an unqualified payout, a reward for reaching the finish line in one piece? To the generation now coming into retirement age, the largest retiring generation in history no less, Social Security was sold just that way- as a reward for reaching the finish line. And to that end, it has been left to flounder about. After all, government promised them it would be there, so why worry about it? Somebody should have been worrying though.

Originally, the number of able workers paying into the system (once it was established) outnumbered those drawing out by something like 15 to 1. Such a ratio was more than adequate to fund retirements and build future payout reserves. As a result, Social Security was widely touted by those of the middle and lower economic classes as a future nest egg that no one could take away, something unknown to previous generations of workers. Then, society was still largely agrarian with more children per family, so who could have foreseen the trend towards urban living and smaller and smaller families, resulting in a shrinking worker/retiree ratio? Even as the situation became more apparent, the focus of social security remained entrenched in the attitude that those monthly checks were a right of birth and any kind of reform was framed from that point of view.

So at this moment of change, we need to ask ourselves just what do we want social security to be about? Do we want a system that promises everyone a guaranteed payout by age 65? Do we want a need-based system that just supports those who don’t make enough money to quit working at age 65? Do we want both? Ironically, the answer to how someone views social security can be found in the name they use to describe it. The words “social security” imply a kind of safety net, something to keep someone from hitting rock bottom. Increasingly, the current debate is being described in terms of “retirement accounts,” which imply a guaranteed pension of sorts, regardless of ones financial situation. Perhaps we are actually talking about two separate issues that have been rolled up into one.

Personally, I have no problems with a national guaranteed retirement program, provided it was equitably applied and designed to account for disparate earning potential. Designed properly, such a program could cover everyone and would alleviate an individuals concern about generating enormous hordes of cash in order to survive ones golden years. Such financial freedom could allow more people the opportunity to fulfill career paths that typically offer less financially but may be more personally rewarding. It would offer people the chance to switch careers throughout their lives without worrying about losing their retirement savings. It could be flexible enough to allow people to increase its potential themselves while strong enough to provide real security in later years without additional personal contributions.

At the same time, we must recognize that social security is a term for helping people through tough times, but not necessarily a means of long-term support. Social security should more accurately describe our efforts to eliminate poverty and hunger and homelessness among our working class and families. Describing this debate in terms of “social security” only clouds the matter at hand. It is a debate about funding our retirement, about who should pay the bill, and about who reaps the rewards of a lifetime of hard work.

[tag]social+security+reform[/tag]

  1. 5 Responses to “Defining Social Security”

  2. By Jersey McJones on Dec 4, 2006 | Reply

    I love Ken’s series pieces!

    Too complex a subject for most, though, unfortunately.

    I would love to do a debate on this with you, but I think I did already last year, and surely you must be tiring of my endless argumentativeness by now.  I don’t blame you.  I get tired of me too.  ;)
    JMJ

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