Tuesday, May 10, 2011

Quote of the Day

"It was never intended as a retirement program. It was set up in '37 and '38 to take care of people who were in distress—ditch diggers, wage earners—it was to give them 43 percent of the replacement rate of their wages. The [life expectancy] was 63. That's why they set retirement age at 65."

Alan Simpson, on Social Security.

Simpson is wrong. Franklin Delano Roosevelt intended for Social Security to protect Americans from "poverty-ridden old age."

"We can never insure one-hundred percent of the population against one-hundred percent of the hazards and vicissitudes of life. But we have tried to frame a law which will give some measure of protection to the average citizen and to his family against the loss of a job and against poverty-ridden old age. This law, too, represents a cornerstone in a structure which is being built, but is by no means complete.... It is...a law that will take care of human needs and at the same time provide for the United States an economic structure of vastly greater soundness."

FDR designed Social Security so that Republicans could not repeal it. Unlike Obama mandating Americans buying private health insurance. FDR did a more painless thing by making it part of the tax system. Over the course of time people would be used to the Social Security tax. Under Obama's health care reform, Americans can look forward to states allowing health insurers to increase insurance rates.

FDR in a private conversation on Social Security.

“I guess you’re right on the economics. They are politics all the way through. We put those pay roll contributions there so as to give the contributors a legal, moral, and political right to collect their pensions and their unemployment benefits. With those taxes in there, no damn politician can ever scrap my social security program. Those taxes aren’t a matter of economics, they’re straight politics.”

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