I’m looking at articles predicting the end of Social Security. The first Social Security check was paid to Ida Mae Fuller on January 31, 1940 – $22.54. Ida Mae, a lifelong Republican, received nearly a thousand times more than she paid in before the grim reaped stopped her eligibility.
The projections I see call for insolvency in 2032. That’s damn near 100 years of life for the depression era program. I tend to think of it as an extremely successful program. The basis of the plan was simple – and census based. On April 5, 1933, President Roosevelt issued Executive Order 6102 forbidding “the hoarding of gold coin, gold bullion, and gold certificates within the continental United States” – so the nation was fresh off the gold standard, and hadn’t seen the levels of inflation that were in store. It originally just covered retirement benefits – survivor benefits and disability benefits came later, and were not in the original calculations. The calculations were based on the birth rate in 1935 was 18.7 live births per 1,000 population – slightly down from 1930, but due for a massive increase with the baby boom – 24.1 in 1950, and rising.
The increased birth rate during the baby boom (the increase lasted until 1966) established a healthy Social Security program. Of course, a healthy government program could afford to add survivor benefits and disability benefits – so Congress added those programs, increased staffing levels and raised tax rates.
2021 and 2022 both showed live birth rates at 11.0 per 1,000 population. Social Security was calculated for 18.7 – and the live birth rate hit 18.4 in 1966 and never reached 18.7 again. The program had been expanded past it’s original intent, the eligible population had been increased to include survivors and disabled, and the birth rate – well, there were fewer and fewer workers to continue supporting the program. That last boomer will be eligible for social security this coming December.
There’s also a cap on Social Security taxes – only Ida Mae’s first $3,000 of income could be taxed for Social Security, and that at 2%. By 1966, Congress was recognizing inflation and the Baby Bust – they raised the rates to 7.7 percent on the first $6,000 of income and added an extra 0.7 percent for the high earners. I could go on with more numbers over the last sixty years – but the trend doesn’t change. More retirees and less workers is a dilemma that doesn’t defy anyone’s understanding.
I’m an early boomer – born at the end of 1949. I started on Social Security about 6 months past my 65th birthday, to cover the cost of health insurance as I retired and my employer-based healthcare cut out. I never expected Social Security to last as long as I want to last. If it makes it until 2032, I’ll be 82 when they start reducing the checks.
As a government program, Social Security has been a great success. It covered my grandfather’s generation, my father’s generation, the generations between them, the boomers, and will cover a few years of Gen X. That’s good planning and management considering the program was designed, installed, and managed by Congress.
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