By MICHAEL GLANZEL
If I were to make rank the important areas of my life in order, Social Security would probably rank around what I had for breakfast yesterday — and I’m sure most people from my generation would feel the same. Social Security is a convoluted, esoteric idea that fails to cross the minds of America’s youth. Yet for millions of Americans, the program is their only means of income — and for many more, the safety net of a Social Security check is a key component of their retirement planning. Today, however, the guarantee of that check is not so clear, as questions surround the solvency of the institution.
When President Roosevelt implemented Social Security in the late 1930s, the program was envisioned essentially as a retirement savings plan — whatever you contributed would later be returned in the form of retirement benefits. The plan was also economically feasible, as there was a highly favorable 37 to one ratio of workers to retirees. Furthermore, the program only covered those who were age 65 and above. Considering the average lifespan was 61 during the 1930s, there wasn’t a vast abundance of retirees to suck up Social Security benefits. Of course, the institution wasn’t perfect, as most women and minorities were not covered under program. Nevertheless, the social safety net helped to lift millions out of the desolation of poverty (and I’m not usually one to praise the programs of FDR).
While Social Security was a well-organized system in the 1930s, the program’s original practicality has vanished. The original concept of Social Security focused on saving individual payments for monthly disbursements to the original contributor after retirement. In essence, Social Security operated similarly to a modern 401K plan. Unfortunately, this concept of savings has vanished. Instead of saving individual installments for later use, the government immediately redistributes the payments to the program’s current recipients. Thus, the government is only focused on spending for current retirees — and is failing to save for future retirees. The economic feasibility of the program has also vanished. Today, the ratio of workers to retirees has precipitously declined to three to one. Certainly, this is not the fault of the government, as Americans are having less and less children. However, the government has done little to account for the changes in life expectancy. Currently, the retirement age still stands at 65 years old –– yet the average life expectancy has exploded to 79. The combined failures of the modern Social Security program have taken a massive toll. Currently, Social Security costs the United States $860 billion –– nearly a quarter of the federal budget. At the same time, the program’s recipients can only expect to receive 75 cents of each dollar they put into the system. If nothing is done to fix the growing problem in the near future, the program will be bankrupt by the mid 2030s. This vision of Social Security is unacceptable. From a purely pragmatic standpoint, the program’s exploding costs have greatly contributed to the nation’s exploding deficits and insurmountable debt. From a more personal standpoint, the failure of Social Security threatens to destroy an institution that is relied upon by millions of Americans.