The following is an excellent excerpt from the book “SOCIAL SECURITY WORKS! Why Social Security Isn’t Going Broke and How Expanding It Will Help Us All” by Nancy J. Altman and Eric R. Kingson from the Forward on page xiii written by David Cay Johnston and I quote: “Social Security stands for a simple proposition: no matter how life works out, whether prosperity or ruin, no one will be left penniless in old age or because of disability or being orphaned.
Social Security is by far the most popular federal government program, the best funded federal program, and the strongest remaining piece of our badly frayed system of social benefits. It is also under relentless attack by those who would kill it.
In their new book, Social Security Works!, Nancy J. Altman and Eric R. Kingson set the record straight. Altman and Kingson are scholars who served on the staff of President Ronald Reagan’s 1982 National Commission of Social Security Reform. They have studied the program ever since and now, as co-directors of the nonprofit organization Social Security Works, work to preserve and improve this vital program that reduces risks for individuals and helps businesses prosper.
Altman and Kingson explain that although Social Security’s primary goals are not alleviating poverty or income inequality, the program goals are not alleviating poverty or income inequality, the program does more to rectify income inequality and prevent poverty among older Americans than any other program, public or private, while also providing crucial protection for orphans and the disabled. More important, they prove that the widely made claims that Social Security adds to the federal government’s perennial budget deficits have no basis in fact.
The fact is that Social Security works efficiently and effectively.
With only tweaks to adjust for demographic and economic changes, Social Security can remain financially sound so long as the United States of America endures. In this, Social Security is no different than our Constitution, which we amended twenty-seven times in the 203 years from when the Bill of Rights was adopted through 1992, when the rules on congressional pay raises were clarified.
National Insurance – Social Security is a form of national insurance, its premiums paid with a dedicated tax on what the law calls compensation for services. This includes wages, including bonuses, salaries, and stock option profits, up to the annual salary cap on earnings subject to tax which was $117,000 in 2014. Compensation above that level is not taxed and is not counted in calculating benefits.
Today more than 44 million retirees, spouses, and their survivors collect a monthly benefit. For another 9 million workers disabled by injury, illness, or violent crime, the same protection is provided. Then there are children whose father is killed in an accident, whose mother is felled by sickness, whose parents are murdered. Because of Social Security’s orphan benefits, the heartless god of chance do not ruin their future prospects.
Social Security shows that Americans care for their fellow Americans and willingly share in the risks, and burdens, that come with building a strong and economically vibrant nation of free people. Numerous polls show that not only do Americans love the freedom from want Social Security insurance guarantees, but by overwhelming majorities they declare their willingness to pay more taxes to expand these benefits. Indeed, a solid 62 percent majority of Republicans favor increasing Social Security benefits, as Altman and Kingson detail in the pages ahead.
Those who collect a benefit each month are not the only ones who benefit from America’s Social Security system. We all do.
A Cushion in Hard Times – In hard times Social Security’s steady, reliable flow of funds to those who earned their benefits, and to their dependents, cushions a general economic collapse. The monthly checks that more than 58 million Americans collected in 2014 kept the beneficiaries clothed, fed, and sheltered. And spending that money also kept others working. But for these leveling effects as Social Security payments are spent, many millions more would have lost their jobs and their homes, adding to the burdens taxpayers endured during the Great Recession and the much too slow recovery from it. Many more small businesses would have failed but for sales to people who received Social Security checks every month.
In every future recession Social Security will provide the same cushioning benefit whenever the economy contracts temporarily, provided that we maintain the program’s financial strength.
This broad benefit in the Great Recession and recovery—keeping money reliably circulating through the economy—came despite modest Social Security benefits. The average retiree’s checks roughly equal the gross pay of someone working full time at the federal minimum wage. The disabled generally collect less.
Social Security also prevents America’s child poverty rate, by far the worst among modern industrialized countries, from worsening. Among older Americans poverty was endemic from the founding of the country through the Great Depression. Starvation and ill health from not having enough to stay safe and warm in old age worked together as advance agents for the Grim Reaper, bringing millions to premature and often ugly deaths. No more, thanks to Social Security.
In our time, thanks to Social Security and the increases in benefits adopted by Congresses under both parties over the past seven decades, only one in eleven older Americans remains mired in poverty. Take Social Security benefits away, though, and every other older American would be in poverty. Among black Americans the poverty rate would triple.
Despite overwhelming popular support, sound economics, and reduction in anxiety as well as poverty, Social Security remains under relentless attack by those who would replace it with costly, unreliable, and inefficient schemes. The opponents would shift the risks to each individual, instead of spreading risks among all of us. The ardent public opposition to President George W. Bush’s attempt to privatize Social Security, however, did not quell the program’s enemies, who are well funded to continue their assault for decades to come.
Unable to win popular support with proposals that would have diverted vast amounts of tax money from Social Security to Wall Street, the opponents try to lure people into their tent with promises of riches for all by privatization and “ownership” of one’s retirement account. These plans defy the laws of simple arithmetic, as you will read in the pages ahead. They also carry the same risks as the Individual Retirement Accounts and 401 (k)s that promoters claimed would make everyone rich but instead enriched Wall Street.
By distorting, obscuring, and flat-out lying, the enemies of Social Security have succeeded in persuading many millions of people that Social Security is on the verge of collapse, threatening to bring down the whole economy. Using big numbers, out of public finance, which is almost everybody. They do not tell people that the trillions of dollars of benefits owed over the next seventy-five years, but not fully paid for under the current rules, equal only a tiny fraction of economic output over those decades. They don’t tell people that the difference amounts to a tiny 1 percent of expected economic output over the next seventy-five years or even to infinity. And they never apply the same scare tactics to government programs without a dedicated tax. The unfunded future costs of national security and public education far outstrip Social Security with its dedicated taxes.
Artful deceptions have been used to attack Social Security from its inception. Despite this, overwhelming majorities in Congress voted for it in 1935. The House tally was 372 to 33, and the Senate vote 77 to 6.
In 1936, Alf Landon’s campaign for president called Social Security a “cruel hoax” and “a fraud on the workingman.” His campaign tried to scare people with baseless claims that an army of federal bureaucrats would be snooping into their lives. Americans responded by giving Franklin D. Roosevelt a second term and 61 percent of their votes.
Countering the Big Lie – Today the distortions and lies about Social Security are so widely and so often repeated on television, in the newspapers, and in magazine that many younger Americans accept as uncontestable truth the dire predictions that they will be taxed all their working lives for benefits they will never collect.
Nothing could be further from the truth.
Social Security has robust trust funds, valued at $2.8 trillion and growing as of summer 2014. That surplus is expected to keep growing until 2020 or so when—as planned—it will be drawn to pay benefits to the baby boomers born during the nineteen years between the start of 1946 and the end of 1964.
Where will the money come from to pay benefits financed from the trust funds, which is basically money we have saved through our government? Easy—the government will simply exchange Social Security bonds for Treasury bonds, not unlike the way that corporations refinance their debt and homeowners refinance houses.
Benefits beyond the continuing flow from the dedicated tax and the surplus can be paid through a slight increase in the tax rate. The flow of funds into Social Security would surge if our federal government adopted new policies that resulted in many more jobs at higher wages than we have experienced since wage stagnation set in at the turn of the millennium.
Who are these Social Security opponents? A few are motivated by greed. The prospect of fat fees for managing individual retirement accounts, making the system less economically efficient, naturally draws ravenous supporters.
Most of the opponents, though, are driven not by greed but by alarm that Social Security is a success. That it works undermines their ideology that government should be small, weak, and focused on the common defense and law enforcement, not on making sure everyone has some insulation from the harsh realities of the economy. These opponents would ignore that one of the six noble purposes written down in the preamble in our constitution is to “promote the general Welfare.” That capital W is in the original.
Many opponents think Social Security is socialism. These same opponents rarely, however, express disgust with, or seek to privatize, America’s socialized police, fire, and prosecution services or our socialized system of roads, canals, and national parks, not to mention our socialized military.
Before Social Security – Before the Social Security Act of 1935, life in the United States was perilous. Economic self-sufficiency depended on being healthy and young enough to work. The prospect of a disabling injury or sickness hung over all but the rich like a modern sword of Damocles. One industrial or automobile accident, one fire, on errant bullet from a bank robber or a drunk could ruin a whole family. Such events were the equivalent of clipping the single horsehair that kept a sword from falling point first into the head of the citizen who an ancient Syrian king let sit on his throne to enjoy the experience while also appreciating the dangers and risks.
The risk of economic ruin served no purpose. It was a risk we did not need, as many Americans recognized in the depths of the Great Depression. The easing of those risks is a tribute to president Franklin Roosevelt and, especially, to the dedication of one woman whose focus and hard work led to the creation of a system of national insurance so that most of us could be protected against economic ruin. A key to this success was a general understanding that those who played by the rules and worked hard could nevertheless be wiped out if age, death, or disability ended their ability to earn.
Frances Perkins became the fourth secretary of labor and in 1933 the first woman to serve in any president’s cabinet. When she arrived at the Labor Department, she found in her office some two thousand ideas from citizens proposing ways to end the Depression and help older Americans left destitute by the economic collapse.
Perkins understood that severe lack of money destroys families. During the Great Depression many teenage boys and girls left home simply because they there was not enough money for food to feed their younger siblings. This altruism was not a rare occurrence. Many thousands of young people left home, some ending up in jail for stealing food when they were starving, some in prostitution for the same reason, some finding menial work that kept them fed, and a few going on to great things after this awful experience.
America can continue to go on to great achievements of the human spirit if we strengthen, expand, and protect Social Security. Nancy Altman and Eric Kingson show what you need to know to stand up for this most popular, most valuable, and best funded of all federal government programs.”
David Cay Johnston
Rochester, New York
(WE JUST GOT DONE READING THE BOOK THAT DAVID CAY JOHNSTON EDITED TITLED “DIVIDED: THE PERILS OF OUR GROWING INEQUALITY” EXPLAINING WHY THE GROWING GAP BETWEEN THE RICHEST BILLIONAIRES AND THE REST OF US IS GETTING WORSE EVERY YEAR. ALL OF THIS IS NOT JUST HAPPENING BY ACCIDENT, IT’S BEING PLANNED BY RICH BILLIONAIRES THAT ARE DELIBERATELY ATTEMPTING TO FATTEN THEIR OWN WALLETS BY BUYING OFF POLITICIANS TO FIND THEM MORE TAX LOOPHOLES TO FURTHER FATTEN THEIR HUGE SALARIES AND WEALTH HOLDING. IN BOTH CASES, EACH BOOK DESCRIBES HOW THEY ARE DOING IN PLANNING THEIR WELL-EXECUTED PROGRAM HOW TO DEFEAT THE 99 PERCENT. IN THE BOOK “SOCIAL SECURITY WORKS!” AND IT HAS FOR MANY YEARS SUCCESSFULLY, KEEPING THE ELDERLY LITERALLY OFF THE STREET AND FROM STARVING BECAUSE THE ELDERLY ESTABLISHED A PAYROLL DEDUCTION FOR THAT PURPOSE WHEN WE WERE WORKING. WE ALWAYS CALLED IT AN EARNED BENEFIT BECAUSE WE PAID FOR IT FOR RETIREMENT. THEY CALL IT SOCIAL SECURITY. NOW, THE REPUBLICANS, ON THE OTHER HAND, ARE CALLING IT AN “ENTITLEMENT” AND SAY WE DIDN’T EARN IT , WHICH SOCIAL SECURITY KNOWS IS A LIE AND I DO AGREE BECAUSE I APPRECIATE THIS WELL-WRITTEN BOOK.
LaVern Isely, Progressive Independent, Overtaxed Middle Class Taxpayer and Public Citizen and AARP Members