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Monday, August 1, 2011

Security - Social and Otherwise

Recently, The Kid demanded to know why I called myself a conservative when each month I accept federal welfare. He meant, of course, my social security check; yes, each month a check (based on my work history, not my husband's) is deposited into my checking account. To my conservative mind, this is income based on an annuity started with my first job back in 1960. But I digress. The Talking Heads have been screaming that Social Security is going broke; I really don't know. What I do know is that things have changed in the last seventy odd years. When FDR introduced this program with the retirement age set at 65, many felt he picked that age because few would live that long, or if they did, they wouldn't live much beyond 70. There was some merit to that argument. The American life span has increased. Further, the program was based on many, many people working and contributing to the fund which made payments to the few. Everything was going along fine; even WWII helped as women entered the workforce and contributed to the social security fund. After the war, these women left their jobs, returned home, and had BABIES. The Baby Boom began. The Boomers grew up, entered the workforce, and contributed to the social security fund. At one time, there was such a large surplus, that LBJ introduced Medicare. We move forward; people occasionally mumbled about social security running out of money but no great panic. Then someone noticed that the Baby Boomers were not reproducing at the same rate their parents did. Then we experienced the Baby Bomb. Those born during the boom years began to retire; the pyramid was now inverted. Fewer workers were funding more retirees who were living about twenty years longer than their grandparents. And to make matters, there is an active underground economy - many workers are paid in cash which means no one, worker or employer, contributes to the social security fund. I'm not sure, however, there is total need for panic. In thirty years or so, most of the baby boomers will be dead. The retirement age has been raised - maybe it should be 70. Perhaps it is time for a means test to collect. Do the very rich really need this money? I have mixed emotions about that scheme. The annual adjustment for inflation stopped - that made me happy. It really did. If The Kid is right that social security is really federal welfare, it is the only welfare that is collected by those who really worked.

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