Social Security

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In the United States, Social Security is a program to provide an adequate means of support for working families and individuals in times of disability, retirement and death. (See also the Social Security framing page.)

Social Security is considered the crowning social achievement of Franklin Delano Roosevelt's presidency; indeed his signature achievement.

  • What YOU Can Do TODAY to Protect Social Security dKos Diary 1/22/2005

Contents

Early History

How it worked at the start and the changes to how it works now.

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Adjustment for Baby Boom Generation retirement

In the 70's and 80's important changes were made to assure Social Security's viability when the so-called Baby Boomers retired.

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Right-wing attacks including current Bush regime attack

With a looming crisis in the U.S. stock markets, a kill two birds with one stone plan was hatched. Destroy Social Security by taking money from it to bail out the Stock Market.

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What is needed to make a great program better

End regressive funding tax cap.

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Some content that needs replacement

It was funded with a payroll tax, and the moneys from the tax were put into a trust fund to pay for the pensions, essentially forced retirement saving. Four years later, the program switched to a pay-as-you go system, where Peter's taxes went directly out the back door to pay Paul's pension, a reasonable approach at the time, when there were approximately 45 workers per retiree. Obviously, this meant that payments out to retirees were much lower than income from the payroll tax. This is the so-called Social Security "surplus" which continues to this day. The money from this surplus was to be saved in a trust fund, but soon became a useful source of additional funds for Congress. The Social Security fund invests the surplus in Treasury bills.

While the surplus continues, there is no obvious problem, but once the number of workers relative to retirees drops to the point where the surplus vanishes (projected to be in ~2017), the government will have to start honoring its treasury notes and paying into the fund in order to continue benefits.

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