Social Security Acts of 1935, 1965, and 2010?
Many things have been said this week about America moving into a Socialist or Totalitarian society as a result of the HealthCare bill passing. The largest sweeping reform, in my lifetime, which creates thousands of new entitlements to each of us – is this the first step toward socialism? No, I would like to propose that this vote is another event reinforcing the fact that the people of America will choose entitlement over free markets, no matter how mad they are about the Healthcare bill right now.
In 1935 Social Security was passed by President Roosevelt. This program was setup to provide entitlements to the sick, the orphans and the widows. Today the program represents over 12% of the total tax burden of the productive taxpayers of the US, while our greatest generation and the baby boomers collect benefits for the remainder of their life(of which they only paid 6.5% tax). By 2017, Social Security will pay more than it collects, and the Social Security fund could be bankrupt by this year, based on some estimates.
Social Security is socialism, but when it’s your entitlement program, it isn’t.
Lyndon Johnson passed the Social Security Act of 1965, which ushered in Medicare and Medicaid, which was the Healthcare Reform act of the time. This massive expansion of government represented a huge change in the medical industry, and was the impetus for the massive expansion created by the Healthcare Bill that just passed this week. Currently Medicare will be bankrupt by 2017, and most states are facing massive budget deficits because of the Medicaid program.
Medicare is 1.45% of every dollar earned by productive members of society, and employers pay another 1.45% to match that value paid by the individual employee. If you are self-employed, you are responsible for the total 2.90%.
Medicare is socialism, but when it’s your entitlement program, it isn’t.
Let’s face it socialism has many forms, but when you stand on the receiving end, it isn’t. So the unfortunate fact is that while the next group of Congressman could potentially repeal the Healthcare Act of 2010, they would never touch the Social Security acts of 1935 and 1965. Consider the fact that in the next voting cycle after each of major acts passed, the people asked for it to be repealed by voting out the Democrats who passed it, but Republicans never did. Even your fiscal conservative all-star Reagan talked about repealing Medicare as socialist program in his campaign for governor, but it never happened in the 1980’s since the will of the people was to keep their entitlement program.
A realistic response to the Healthcare bill is that, this is really what all Americans want. If you readily accept Socialism through one entitlement act or another, what would prevent you from taking it in another form? Complain and complain all you want, but at the end of the day, it’s what YOU wanted. Entitlement plans are a social reality in America. The unfortunate reality is you are only against this new entitlement right now, because you have yet to receive the first benefit.
March 29th, 2010 at 7:57 pm
Wow initially I found it hard to take the theme of this post. I won’t try to challenge the general sentiments application to today. However I’m not sure it applied to the extreme it does today say back in the 30’s or 60’s.
I suspect the one thing that has always been true about the introduction of programs like those mentioned. The politician’s always mischaracterize, dare I say lie, about the nature of the programs.
Concerning Social Security, I seem to remember it was sold to our fathers as an insurance program. For instance the SSA’s history web page includes the following.
“The “New” Alternative
With the coming to office of President Roosevelt in 1932, and the introduction of his economic security proposal based on SOCIAL INSURANCE rather than welfare assistance, the debate changed. It was no longer a choice between radical changes and old approaches that no longer seemed to work. The “new” idea of social insurance, which was already widespread in Europe, would become an innovative alternative.
Social insurance, as conceived by President Roosevelt, would address the permanent problem of economic security for the elderly by creating a work-related, contributory system IN WHICH WORKERS WOULD PROVIDE FOR THEIR OWN FUTURE economic security through taxes paid while employed. Thus it was an alternative both to reliance on welfare and to radical changes in our capitalist system.”
If this account is accurate I suppose people back then may have believed what the politicians were telling them. In effect they were paying into a system to provide for themselves.
Concerning Medicaid, here’s a portion of a Lyndon B. Johnson speech; Medical Aid under Social Security on May 9, 1964
All we are asking for is a program under social security, which will let the worker put in about $1 a month from his average lifetime earnings. The average manufacturing earnings in this country are now $100 a week. We ask $1 per month when he enters the labor market from the employee and $1 per month from his employer and the Government does not put in a single cent. But under this plan all Americans, not just the rich and affluent Americans, all Americans can face the autumn of life with dignity and security.
Twenty-four dollars a year, if you enter the labor market at 20 and stay until you are 65–45 years at $24 makes a little over $1,100, multiplied by the formula 3.75 and you have almost $4,000 when you are 65 in your account to take care of your hospital needs. What little you may have saved during that time can go to pay the doctor of your choice. He is not interfered with in any way. He is really served by having a fund to pay your hospital bill because, as it is now,
he has to wait until the hospital is paid for and the nurse is paid for and the medicine is paid for. If there is anything else, he gets it, so why in the name of goodness are they fighting this bill, I don’t know.”
Hmmm… just a meager amount of money from you matched by your employer and at no cost or involvement by the government and “all Americans can face the autumn of life with dignity and security”. How wonderful!
Of course that brings us to today’s national health care insurance mandate. Let’s see what promise comes to mind oh yeah “this bill pays for itself” and participation is no longer an option.
I don’t know if we the people have changed that much. The politicians on the other hand haven’t changed. They continue to lie to us and expand the scope of their intervention and control over our lives with every improvement they make.
There is one theme I hope will change. Up to this point the governments’ efforts to help us have all headed towards bankruptcy. Of course I’m ever hopeful about government intervention; maybe Obama’s plan will be different. OK just kidding.
March 31st, 2010 at 7:16 pm
This is a very insightful and I believe it shines a light on how America has always viewed social programs. I am not affiliated with the Tea Part and actually find I disagree with most of what I perceive to be their position on many issues. I do however love the idea of an organization that is run by middle class Americans for the benefit of middle class Americans.
I also wanted to note Jon, the first commenter, had a well written post, but I would disagree that this current health bill is more ‘extreme’ than what FDR proposed. I would even say that FDR’s Second Bill of Rights (1944) went much farther. FDR strongly believed health care to a right of the people, among other things such as education, home etc. I do however agree that the current bill will most likely not pay for itself, unless there is much more cuts to unnecessary/unproductive programs and a stabilization of costs. Both of these were not definitively covered by the CBO reports I read. Thanks
March 31st, 2010 at 11:27 pm
I completely agree with the sentiment and the fact that we all need to overcome our desire to cling to the one or two entitlements or spending programs that keep us from saying that government needs to cut spending except for…… I hear so much talk about Republicans fighting new spending when they are in the minority, but nothing about what they should have cut when they were the majority. If we really want to push government back to sustainable and constitutional limits it will require self sacrifice, and yes this means cutting programs that we like because we get benefits from them. It is hard medicine but the patient is our nation and it needs to be saved.
April 2nd, 2010 at 12:06 am
Mike, I sense you have heard many things about the tea party both good and bad. I hope you have a chance to visit a tea party group in a neighborhood near you. The spectrum of people and opinions is so vast among people who participate it would be difficult to generally say you disagree, except on a very specific issue. I sometimes forget that not everyone realizes we are all political parties or no political party. The only common theme is a desire for govt. to start showing some fiscal responsibility like we each must do with our own finances at home. We all would like govt. to be less involved in the day-to-day decisions we make in our lives (limited government) and in running our businesses, hence free markets. I guess there are people who disagree with these principles, I just haven’t met many of them.
April 3rd, 2010 at 10:27 am
Hello Mike,
Thanks for the response. For clarification the underlying theme in my post wasn’t intended to compare any particular administration in terms of policy extremes. Rather it was to convey the idea that there is a history of legislators (of all stripes) appealing to the public with perhaps well intentioned policy changes. That is things that everybody would like to see done. Over time however the long term end result ending up being much less desirable.
Now that you mention relative extreme’s you got me thinking. I would have to say the latest attempt is more extreme. Not in stated end objective (as you point out FDR’s second bill of rights) but in execution.
I say execution in the sense that the health care bill includes the provision that every American (minus some exemptions) is required by federal law, for the first time in our history to purchase a product or service from privately held corporations. As a matter of law this has never been adjudicated as I understand it, examples of State drivers licensing not withstanding.
Again thanks for the thoughtful challenge. I’m constantly questioning what I believe by boring into why I believe it.
On that note I would second Ed Bell’s suggestion about perception and attending a meeting in your area. I went to my first meeting not sure what I was in for and prepared for anything. The experience was more like attending a PTA meeting. What surprised me more than anything was the number of people involved in governance for the first time in their lives.
Regards
August 10th, 2010 at 8:12 am
“Many things have been said this week about America moving into a Socialist or Totalitarian society as a result of the HealthCare bill passing”
Yes and those things are invalid. Just because people say them does not give them reality.
“Social Security fund could be bankrupt by this year, based on some estimates.”
Isn’t this a good thing for you? We can finally end the tyranny of social security by forcing it into insolvency.
“Social Security is socialism”
No its not. Read some of the classic socialist literature. The welfare state is just Capitalism V 2.0. You have your own definition of socialism.
“The unfortunate reality is you are only against this new entitlement right now, because you have yet to receive the first benefit.”
We need to think beyond just entitlement spending. There is a whole complex array of subsidy and largesse provided by the State to various parties that should be dismantled.
Dismantling some of these (such as agricultural subsidies) should logically fit with the ideology of both the Tea Party and various left minded groups, uniting over these common concerns might be more effective than putting Nazi mustaches on Obama.
The key is to build alternative institutions to the State. Just throwing people into poverty to satisfy your ideology or hope for a tax cut is not the solution. We need to build institutions and local or community level that can compete with those of the state.