Social Security

Peter H Christian
6 min readOct 1, 2023

“The rule for effective governance is simple. It is one Ronald Reagan knew by heart. And one that he successfully employed with Social Security and the Cold War. When there is a problem, you fix it. That is the job you have been sent to do and you cannot wait for someone else to do it for you.” — Chris Christie

I recently got into an online discussion with someone regarding whether the Republicans want to get rid of Social Security as President Biden keeps telling us. What he stated was that Senator Rick Scott had publicly declared his intent to do so.

This is interesting since in February 2023, at a roundtable discussion with Florida community leaders and seniors in Sun City Center, Senator Scott announced his Protect Our Seniors Act to preserve and protect Social Security and Medicare. During the roundtable, Senator Scott discussed his work to protect seniors from Washington’s dysfunction and the pain caused by President Joe Biden’s raging inflation crisis, and two years of failed leadership that have endangered critical entitlement programs and pushed Social Security and Medicare closer to insolvency.

So the one example of a single Republican turned out to be inaccurate much like the arguments I get from people telling me I should be more informed about things.

To a person, I think we know that Social Security is in trouble.

Based on total mismanagement by our government, it is predicted that if nothing is done soon, in 10 years money coming into the system will be exceeded by disbursements and the government may have to reduce retirees payouts by 25%.

“Social Security is an insurance policy. It’s a terrible investment vehicle. Social Security has some great benefits. But it was never meant to be a savings plan. So we need to have a national debate. Should this 12.5 percent that we’re contributing all go into a Social Security pool, or should half go into a mandatory savings plan?” Laurence D. Fink

To better understand what is going on, I looked into the history of Social Security. Here is what I found.

Franklin Roosevelt signed the Social Security Bill into law on August 14, 1935,. The bill promised a plan for social insurance as a safeguard “against the hazards and vicissitudes of life.” The original Act established a national plan to provide economic security for the nation’s workers and to enable the states to provide more adequate welfare benefits to its citizens.

Under the 1935 law, only paid retirement benefits to the primary worker. A 1939 change in the law added survivors benefits and benefits for the retiree’s spouse and children. In 1956 disability benefits were added.

Initial payments into the system were paid both by the employer and by the individual. For the next 3 years they were to pay 15 cents to 30 cents a week or more, according to what a person earned. In other words beginning January 1, 1937, the worker was to pay 1 cent for every dollar earned, while at the same time the employer was to also pay 1 cent for every dollar earned up to $3,000 a year.

Beginning in 1940 the worker and the employer was to pay, 1.5 cents for each dollar earned, up to $3,000 a year. This was the tax for 3 years, and then, beginning in 1943, both were to pay 2 cents, for the next 3 years. After that, both were pay half a cent more for 3 years, and finally, beginning in 1949, the worker and the employer would each pay 3 cents on each dollar you earn, up to $3,000 a year. That was the most they were to ever pay.

As of today, employees pay a 6.2 percent contribution from earnings up to a maximum of $160,200 which their employers match. Self-employed workers pay both shares of the contribution, or 12.4 percent. So much for the $3,000 maximum per year.

So what happened? Well, lots of changes were made to the program. A brief history follows:

August 10, 1939: The program is broadened to include benefits for workers’ dependents and survivors. More people added without additional pay in.

October 1950: Congress authorized the first cost-of-living adjustment (COLA), an increase of 77 percent. Does your pension, 401K or IRA do this?

August 1, 1956: The Social Security Act amended to provide benefits to disabled workers ages 50–64 and disabled adult children. More added who don’t pay into the system.

September 1960: President Eisenhower signed a law amending the disability rules to permit payment of benefits to disabled workers of any age and to their dependents. Payouts continue to increase to those who don’t pay anything into the system.

June 30, 1961: All workers were now allowed to take early retirement at age 62, albeit at a reduced Social Security benefit. Previously benefits could not be claimed until the normal retirement age (NRA) of 65.

Oct. 30, 1972: Congress established Supplemental Security Income (SSI), a national benefit program administered by Social Security that provides monthly cash payments to older, blind and disabled people with very low incomes and limited assets. More payouts.

July 1975: First annual automatic COLA, an 8 percent increase, was paid. Before 1975, each COLA required authorization by Congress.

July 1980: Beneficiaries received the highest annual COLA increase ever — 14.3 percent. The inflation rate in 1980 was 12.5 percent.

What happened was a system to provide for workers now included many non-workers who paid nothing into the system. In addition, payments were increasing based on rising costs.

If that wasn’t enough, in the 1960s, the Government decided that they could spend any money in the Social Security account on other things. Since then, they have borrowed $1.7 trillion from the Trust Fund. So, the government has borrowed the total value of the Trust Fund to pay for other government spending.

Remember when Al Gore ran against Bush II for president and he talked about a Social Security lock box? That box holds an IOU from the government for the money they have taken. There is nothing there. Social Security depends on workers paying into the system and then using that money to pay those receiving Social Security.

As the U.S. population ages and more Baby Boomers retire there are now fewer workers left to contribute to retirement benefits. The Trust Fund is projected to be depleted by 2033 as a result. If no changes are made before the fund runs out, the most likely result will be a reduction in the benefits that are paid out.

While Social Security may have been a good idea in the day, as with almost every government program, it gets convoluted and corrupted over time. What started as a way to help WORKING people in their old age, became a way to buy votes on their backs. And then to greedily dip in and use the trust fund for other purposes is outright criminal. Imagine a company doing that with their pension fund. The executives would be behind bars in no time flat.

“In order to fix Social Security, we must restructure it so that we continue to provide for our Nation’s seniors that are approaching retirement age, but allow for younger taxpayers to invest a portion of their Social Security taxes in private accounts” — . Herman Cain

Anyone who believes the government is good and competent, lives in another world. That is why we are $32 trillion in debt with nothing to show for it.

I am sure Social Security will be saved in one form or another. I imagine what a nice retirement fund I would have if I kept that money and put it into my own retirement fund and not the government’s. And that may be the long-term answer to the fund. In the meantime, those in the working world will dutifully pay so I can get my monthly payments.

Remember Ronald Reagan’s words, “The scariest words a person can hear are I am from the government and I am here to help you”.



Peter H Christian

Peter played a key role in the 700% growth of Crayola over 17 years. His first book, “What About the Vermin Problem?” is now an Amazon bestseller.