Social Security - Then and now17 August 2018 was the 83rd anniversary of the passage of the Social Security Act of 1935
This act has been referred to as 'the third rail of American politics" because Congress has been shocked too many times when approaching it with the intent to modify the basic social contract, which was "hold a job for 40 quarters of a year (10 years of continuous employment) and you will qualify at ages (varying) above 62 for a monthly pension for the rest of your life."
This basic formula was never mathematically sound. The payouts to individual workers were always likely to exceed the pay-ins from those same workers. In economics-speak, the entire program represented transfer payments from one set of younger workers to one set of older, retired workers. It was never the actuarial equivalent of an annuity linking pay-ins from one worker to payouts to that same worker. And it has been amended copiously every year or two, as coverage and program mission has expanded. But it is also credited with reducing the proportion of older persons living in extreme poverty.
How could this possibly work? By having the larger pool of younger workers paying in more than was being paid out to the pool of fewer retired workers. For decades this was the case. Now, however, with shifts in the relative sizes of the working and retired pools, and in the shift from lifetime employment to a series of jobs, sometimes interspersed with periods out of the labor force or unable to find work, inflows of social security taxes are no longer esceeding payouts.
As a result the Social Security Trust Fund is beginning to decline. Without changes, money to pay out monthly will be lacking.
Now the rubber meets the road: do we, Americans, want to reduce payments to persons who have 'earned' them in the work life or do we want to increase the pay-ins to the Trust Fund and keep the bargain with workers. This imbalance can be remedied in various ways. Creating these remedies has been put off again and again, but the problem only gets more difficult to fix with passing time.
Finding out more about Social Security:
The Truth About Social Security: The Founders’ Words Refute Revisionist History, Zombie Lies, and Common Misunderstandings. Paperback – August 14, 2018
Social Security Basics: 9 Essentials That Everyone Should Know Kindle Edition
And many others. Just search for "social security books"
Web SourcesSocial Security (United States) Wikipedia.
This is a long, long article with many tables and citations. I believe it is a good starting place. Beyond this are many links representing different points of view. I leave these to the reader to find according to taste. This post should be considered merely a starting point, not a scholarly review.
Recently I learned of the connection between the siting of the Blue Ridge Parkway, the passage of the Social Security Act and Robert L. Doughton, a powerful member of congress from northwest North Carolina in the 1930's. It is a fascinating story of back room meetings and compromise and tradeoffs. Do a search for "social security doughton blue ridge parkway" and you will find many links.