In 1935, as part of the New Deal, Franklin Delano Roosevelt signed the Social Security Act, which provided economic support to the people of America. Title II-Federal Old-Age Benefits, which is what we now think of as Social Security, provided assistance to a worker after retirement at age 65.
Throughout their working life, people were to pay taxes that contributed to the Social Security fund. Everybody would pay taxes throughout their lives to this fund, and then, upon retirement, would be able to receive benefits from the act. This act was to solve the issue of people being too old to work, yet still in need of money to live. Basically, Roosevelt created a retirement fund for all of America.
When the act was put into place, the average life expectancy was around 62 years old. By establishing the retirement age/Social Security eligibility at 65, the lawmakers were making a good bet that the program would always have sufficient funds. The odds were that people wouldn’t actually make it to the age at which they would be able to withdraw Social Security. The people who did make it to retirement at 65 would then be able to receive benefits from the fund which included the taxes paid by all Americans, even those who didn’t live until the established retirement age. The equation at the time made perfect sense: Money paid by all Americans = Social Security funds, Number of Americans alive at 65 – number of Americans deceased before 65 = number of people withdrawing funds. This means that a surplus would always be there.
What the law makers failed to consider was the trend of rising life expectancy. In the current day and age, the life expectancy is close to 80 years old. This means that, through this act, an average American can live the last 15 years of his/her life through the support of the government. The numbers just don’t work at this point. With the average person living well past the retirement age, the funds are bound to run out. In fact, they have. The current Social Security debt is over 700 million dollars. With life expectancy rising, this debt is bound to continually increase.
When the Social Security Act was written, the eligible age to receive Social Security benefits should have been based on the life expectancy. If the eligible age to receive support had continued to be higher than the life expectancy, the nation wouldn’t have found itself in this great debt. This money that is now owed to American citizens could have been put toward medical research, national security, infrastructure, etc. Who knows, maybe we could have a cure to cancer, peace in our country, or improved roads and housing. If the lawmakers had been more cognizant of the future, these things could be possible. If any politician ever addresses this issue, it is reasonable to assume that he/she wouldn’t be the most popular person at the time; people don’t like having their promised money taken away from them. However, in all actuality, this is an issue that needs to be addressed for the well being of the American people, and it is about time somebody stood up and said something about it.
http://www.ssa.gov/history/briefhistory3.html
