America’s Addiction To Social Insurance [Reader Post]

Flopping Aces ^ | 03-17-10 | Sean

[Starman417]

Since the days of President Franklin D. Roosevelt and the advent of his Social Security program in 1935 Americans have been addicted to the false sense of security that the program provides.  Social Security has given Americans the false perception that they and their families are insured against the economic woes inherent of things such as old age or disability.  They have been duped into the belief that each month they make contributions to a trust that will one day be payed back to them or their families.

The reality of Social Security is far different than the one perceived by many Americans.  Social Security was first passed into law in 1935.  The federal government began collecting taxes to fund social security in 1937.  They also payed out one lump sum payment in the same year.  Regular monthly Social Security payments began in January of 1940.  There is only a three year gap between the time they began collecting taxes for Social Security and the time that they began making regular monthly payments.  This short time period made it impossible for the amount of money being payed out to those collecting Social Security to have been properly backed by the money that the same individuals payed in.  As a result, the money that one generation pays in is immediately payed out to the older generation that is collecting Social Security, and on other government expenditures.  An interest baring IOU is put into a "fund" in place of the money that the younger generation is paying in.  The debt and interest from these IOU's continually accumulate, and given that most if not all funds paid into social security is immediately spent, the debt and interest is never paid.  This debt has ballooned, and like all pyramid schemes it will eventually come crashing down; which will be a disaster for this country.  The US federal government has mislead many unwitting American's into believing that they are putting away their own money for the future; but this is simply not true.  If something is not done, the Ponzi scheme that is Social Security will cause another and far more damaging economic meltdown in this country.

The major problem with weaning the country off of Social Security is that no one wants to give up the money that they have paid into the system over the course of their careers.  Many Americans have this sentiment:  "I'm collecting Social Security when I retire, I've been paying into all this time.  I want my money back."  This attitude is more than reasonable.  Who can blame them? Who would want to give up money they have been saving all of their lives?

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