Social Security

         Social Security was developed in 1935 to provide cash payments to Americans that lived in the United States.  History has taught us that Social Security became a program that lead to corruption and dependency on our federal government.  This program has been given the reputation of the worst program to collect and steal the hard workingman’s paycheck.  Before the 1970’s, Social Security had the potential of becoming a very successful program, but before it has a chance of becoming successful again, it should be separated and privatized from the national government so that Americans can receive the full benefit of the program.

         A President named Franklin D. Roosevelt first founded Social Security in 1935.  Roosevelt developed this plan to help the common worker meet expenses when they were older and no longer able to work.  The concept was that the worker would pay Social Security Tax until they reached the minimum age required to collect.  The major problem with Social Security as it now exists is that the federal government, which controls the funds, uses the money to support federal expenses that have nothing to do with Social Security.  Before the Social Security funds were considered part of the federal budget, the program had more money than the federal government could spend during the 1960’s.  However in the 1960’s, the federal government began to spend more money than it was taking in by supporting programs such as the space race to the moon, fighting the war in Vietnam, and supporting President Johnson’s ‘Great Society’ programs.  So the government took the matter into their own hands and made Social Security funds part of their main budget.  Because the program is now under the main budget, citizens will pay twice as much into social security than what they will get out of it. It is feared that the federal government will never be able to repay the money it has already borrowed from the social security funds.  A solution to this problem would be to take the social security contributions away from the control of the federal government and put them under the control of the workers themselves.  This is called the privatization of social security.

        Under the privatization program workers would have more control over how their money is invested and would have the potential of earning higher rates of return than is currently being earned (1).  The main argument against privatizing Social Security is that some critics believe that individual accounts would be too complex and costly to administer.  However, there has been research done on the issues involved in developing individual accounts that shows that a privatized system would be affordable even if it were more costly (1).  Thus, even if the cost would be higher than a government run program, the workers would know that the federal government could not steal the money and use it for other programs.  Also, through a privatization program the federal government would not be able to claim that it is balancing the budget when it is really using the excess money being contributed by workers into the social security program.  Opponents believe that it is better to use the social security money as opposed to borrowing money from the private sector at higher interest rates, and they can also use the money to support social programs (1).  But the fallacy behind this argument is that the money they are borrowing does not belong to them; it belongs to the workers who are contributing.  Through privatization, the federal government would not be able to use social security money to spend more money than it is earning.

        Today’s government just doesn’t have the money to pay back workers the benefits that they were promised.  However, a privatized Social Security system would at least be able to maintain its integrity far better than our current, bankrupted, pay-as-you go system.  A privatized system gives individuals more freedom to run their lives, and provides better security.  By letting the government keep control of the Social Security program, the worker’s are being kept from having their money work for them as opposed to the federal government.  Critics have said that government control would keep the program from collapsing and without financial support the program would simply disapear.  This accusation is false because privatizing could give workers more money in their retirement and give the program a better foundation for future generations to also participate.

         In short, the present saying is that “when the young get older they are not going to have a chance to get one penny of Social Security.”  This is because unless there are some significant changes, the social security trust fund will be bankrupt by the time the baby boom generation gets through using it for their retirement needs.  Thus, although a privatization system may limit the ability of the federal government to spend money, it will at least restore confidence in the system and provide future generations with a vehicle they can use to plan for their retirement years.

                                                                        Works Citied

1) Tanner, Micheal.  “Privatizing Social Security: A Big Boost  for the Poor”.  July 26,1996.
          http://www.socialsecurity.org/pubs/ssps/ssp4.html