Social Security celebrates 70 years
REGION-On Aug. 14, 1935 the Social Security Act became law with the President’s signature in the Cabinet Room of the White House. Now, 70 years later, its future seems to be a mystery to many people.
Through the years the policy has seen many different changes. In 1939 the program was broadened to include dependents and survivors benefits. In 1950 the legislation extended coverage under the old age and survivors insurance program to about 10 million more persons. In Aug. of 2000, based on data from the Bureau of the Public Debt, the invested assets of the combined OASI and DI Trust Funds passed the trillion-dollar mark at $1,001,712,600.
Recently, another change has been proposed. Many feel Social Security should be privatized.
Demopolis Area Chamber of Commerce President Jay Shows said a change could benefit people, but felt it would be a difficult task.
“If you look at it, the initial idea behind it for most people is that it goes against the idea of small limited non-intrusive government,” Shows said. “I think it is so engrained into our thinking process it is a huge undertaking for it to be changed from a fully government operation to privatization of any sort.”
Shows said if done properly, the privatization of benefits could have definite advantages.
“If you pay into it for 50 years and start drawing at 67 and then you die at 70 if you had taken that same amount of money over those years and bought some disability insurance and literally invested in the stock market and got a six to 10 percent return you would enlarge your amounts from the government each month,” Shows said. “Plus when you died, you would have something to hand over to your children.”
However, the government can’t legislate responsibility. Shows said if people were able to follow the system in a responsible manner it would be extremely beneficial.
“That takes a disciplined person to buy the disability insurance,” Shows said. “It takes a disciplined person to set aside the appropriate amount and not go on vacations or spending sprees. If we were disciplined enough to do that everyone would be better off if it was 100 percent non-government and just have government programs like the welfare state.”
A 70-year-old system would be tough to change. Shows said people have become so accustomed to the current system they have built a comfort zone within the system.
“I just think it is too engrained in us now, the Social Security system,” Shows said. “I just can’t foresee much change at all. I think it is going to be primarily funded through payroll taxes because it feels safe.”
Thomas Bell, owner of Bell Financial Services, said he felt the system should be privatized.
“I am not on the fence about it whatsoever,” Bell said. “I think they should privatize it. I think you have a chance of a better return on the money that you are paying to Social Security.”
Bell said the younger generation would see tremendous benefits from the move to privatization.
“It would mean a lot more to younger people,” Bell said. “It definitely would benefit the younger people and I think something even more important than the fact that you would get a greater return on it is it is in your name and you have ownership of it. At your death it passes on to your beneficiaries.”
Many feel the current system is on its last leg. Bell said he would like to see action taken before the system in place crumbles.
“The credible sources seem to indicate that the system we have now is not going to be a viable program in years to come,” Bell said. “Many feel it would make a lot more sense to try to get something before it reaches a point of demise.”