Sunday, February 06, 2005

A Look Back At Social Security

There is a great essay at The American Enterprise Magazine website. After listing all the "new" innovations of 1935, as well as the then current conditions, essayist Karl Zinzmeister takes us back to that period and writes: "...

Admittedly, the U.S. economy has seen better days. The human disruption of the Dust Bowl storms is just beginning to subside. A quarter to a third of today's U.S. population is quite poor. "And amidst our economic disappointments, life's other ancient maladies continue to sting.

Doctors still have no effective medicines to stop biotic infections. Tens of thousands of American children will be crippled by polio this year. U.S. life expectancy averages only 59 years and some months. "That last figure explains why another of the year's milestones produced only a mild ripple among the public: This August 1935, Franklin Roosevelt pushed through Congress a program for universal government-paid pensions.

Checks will begin to mail as soon as this new "Social Security" plan takes hold. But full benefits don't commence until age 65--and, as a plain fact, most of us will be gone before then.

"So: Do you want to base your security in old age on a program engineered at the same time as the Model A and the vacuum-tube radio? Has work changed much since the era when slopping pigs for Auntie Em was a typical job? Does the boundary between state and individual look different now that the USSR has gone from progressive polestar to oppressive flop?

Has American finance advanced from the decades when the only choices for ordinary savers were the passbook, the mason jar, or the mattress? Are the retirement goals of Americans still the same as in the days when the Bambino retired? Or is it time for Social Security to enjoy a major-league update?

Excerpt from John Mauldin