Social Security
As the American population ages, the ratio of workers paying taxes into Social Security to retirees drawing money out of the system decreases. It is a simple matter of demographics. In 1950 there were more than 16 workers contributing to the support of each retiree. Currently, the ratio is about 3 workers per retiree. It is projected that in another 30 years the ratio will have dropped to less than 2. Clearly, the current Social Security system cannot go on as it is. This demographic trend and its implications for the Social Security system have been known for decades. There is increased awareness now that President Bush is talking about it, but conservative pundits have been warning about the inevitable bankruptcy of the current Social Security system for a long time.
What can be done? The conservative pundits long have been harping on the seemingly inevitable wrong-headedness and inefficiency of government programs. It is not difficult to show that money “invested” in the markets consistently yields a greater return than ever was generated by Social Security. If only the government would stop their meddling, the pundits have been saying, and leave us free to “invest” our money instead of paying it into the inefficient Social Security system, then we all would be much better off and the demographic time-bomb would be defused. However, this approach really would not solve the problem. It only would exchange one demographic time-bomb for another. Instead of worrying about whether there will be enough taxpayers to keep each retiree living well, we would then have to worry about whether there would be enough debtors to keep each retiree living well. As the current system depends upon a steady stream of workers paying taxes, so the “private accounts” approach would depend upon a steady stream of debtors paying usury.
Parenthetically, let us look at the question of the return on “investment” in stocks vs. the return on bonds and loans. Theoretically, the return on stock ownership is a legitimate and ethical business practice vs. the sinfulness of usury. However, what we have in post-modern economics is far from the theoretical purity of stock investment vs. money-lending. This is why I put the term “invest” within quotation marks. Pure investment is considered far too risky nowadays. After all, a profit is not guaranteed. Virtually all stocks and “mutual funds” these days are “hedged” with usury, whether government bonds or money-lending of one kind or another. So, regardless of whether a “private account” is “vested” in out-right money-lending or in the stock market, the return on such an account depends upon a steady stream of usury from a population of debtors. Financial counselors will tell you to avoid debt like the plague, and at the same time will tell you to go for the highest rate of return you can get. Are they really oblivious to the fact that no one can follow the second part of their advice unless many others choose to ignore the first part?
The conservative pundit’s critique of Social Security lacks usefulness simply because they fail to question the whole premise of retirement. They bewail the “welfare state” as unproductive people living at taxpayer expense. They do not challenge the basic ideal Social Security as amounting essentially to the same thing, but instead devote all of their commentary to trying to find a more efficient way of accomplishing the goal. Unproductive retirees living on usury at the expense of debtors is thought to be more principled than living at taxpayer expense only because conservatives refuse to acknowledge the illegitimacy of usury. Some might wish to draw a distinction between welfare and retirement, pointing out that the “welfare bum” is potentially productive though living off others while the retiree is old and beyond productive potential. However, this does not at all align with the ideal of retirement. The retirement ideal for which many strive is to cease productivity as soon as possible so that they have many years of health and potential productivity that they may devote instead to leisure. Conservative pundits do not challenge this ideal but instead seek more efficient ways of funding it. But in all of this they misunderstand the historical premise of retirement and the true nature of the Social Security system.
In his book A History of Retirement, William Graebner [ New Haven: Yale University, 1980, 293 pages ] explores the origins of the modern idea of retirement and of the Social Security system. He shows that the modern idea of retirement arose in the context of urbanization and industrialization in the latter part of the 19th century and was prompted by government efforts to address unemployment problems. As a result of urbanization and industrialization, combined with a series of late-19th century bank panics, there emerged a growing unemployment problem among a growing population of younger Americans. This created the social problem of how to get older and less productive workers out of their positions in order to make room for younger ones. “Retirement to the family farm was one thing; retirement to a New York City tenement another. In the urban-industrial economy of 1900, workers without savings and without community ties to reduce the anxiety of retirement clung to their positions.” [ p. 14 ] In this socio-economic context Dr. William Olser prompted general public debate of retirement with a commencement address at Johns Hopkins on February 22, 1905. He titled his address “A Fixed Period,” after an Anthony Trollope novel by the same name. The novel concerns a fictional land in which at age sixty men retired to a “college” for a year of contemplation before a “peaceful departure by chloroform.” In his address Dr. Osler suggested “the comparative uselessness of men above forty years of age,” and, “…the uselessness of men above sixty years of age, and the incalculable benefit it would be in commercial, political and in professional life if, as a matter of course, men stopped work at this age.” [ p. 4 ] He suggested that the benefits would derive from gaining the superior work of younger men and also from avoiding “…the many evils which they [ the old ] perpetuate unconsciously and with impunity.”
There was much debate generated by Dr. Olser’s remarks, which by no means garnered immediate consensus. However, the problem these remarks addressed persisted and, indeed, increased. Regardless how noble was the popular idea of the dignity and venerability of the elderly at the turn of the 20th century, it was increasingly a sentimental view disconnected from a truly Christian idea of family and culture. An interesting thesis to explore would be the relationship between the socio-economic problems at the turn of the 20th century that led directly to the modern idea of retirement and the thorough secularization of American culture that was occurring at that same time. The urban-industrial climate pressed for resolution of the employment issues it created, and re-assessing urban-industrialism was deemed out of the question. Therefore those who initially might have been shocked by Dr. Osler’s ideas were constrained eventually to embrace them. “As William Osler had so clearly seen, a society that is dedicated to progress and allows its economic institutions to define its terms must learn to sacrifice the older generation for the younger.” [ p. 53 ]
The Social Security Act came to fruition in 1935 directly as a means of addressing unemployment and general economic problems. The greatest myth of Social Security is the idea that it was designed and intended for the care and benefit of elderly Americans. Surely, this is what its name implies. And surely this is how the current population of elderly Americans have come to regard it. However, Graebner provides extensive documentary evidence to show that, “The Social Security Act was…a piece of retirement legislation which promised to accomplish what other retirement legislation had accomplished - the removal of people from the work force.” [ p. 184 ] A corollary motive of the legislation was to provide that the non-productive elderly might nevertheless continue to function as consumers. Bureaucratic ideas of retirement and the funding of retirement are grounded in, and are meant to address the problems engendered by, impersonalized, urbanized, and industrialized capitalism. The motive and the goal is bureaucratic manipulation and control of “the economy” moreso than the care of the elderly. Now, with Social Security on the brink of bankruptcy, politicians are in the delicate spot of having to deal with the issue in keeping with its original goal of manipulating “the economy” while at the same time allowing their constituencies to persist in the delusion that it all is meant for their personal benefit.
Unemployment and consumerism are problems inherent in modern capitalism and so the difficulties of retirement are not confined to government programs. Corporate pension plans find themselves in similar troubles as Social Security. Graebner argues that, “…retirement was a reaction against the continued influence of personal modes of behavior in institutions in which personal relationships were increasingly seen as dysfunctional relics of the past. To a certain extent, the application of personal qualities to business affairs is inherently dysfunctional by capitalist definitions. Employment practices should reflect economic rationality rather than priorities established by family and friendship.” [ p. 265 ] Or, as the popular slogan puts it, “Business is business.” The state of General Motors today is a good illustration of dilemmas created by capitalist manipulation. For decades General Motors cultivated a talented workforce of people - not the old-fashioned way based on the “dysfunctional relics” of “family and friendship,” but by promising them the Moon upon retirement. Today, it costs General Motors over $1500 per vehicle sold just to pay the health-care costs of their pensioners. It costs them so much to fulfill their contract with pensioners that they cannot afford to maintain current staffing levels, and recently have announced plans to lay off up to 28% of their white-collar staff. Retirement is designed as a means to get older workers out so unemployment of younger men is relieved, but now they need to lay off the younger men in order to continue to afford what was promised to the older men. And the old way of small communities, agrarianism, and personal relationships is called “dysfunctional”!
Christians are too quick to embrace Conservatism as the champion of “family values.” There is no true family value in the “Social Security” system or in the current idea of retirement. Yet instead of working toward a truly Christian idea of family values, Conservatism is interested only in making some adjustments to the system in attempt to save it. The truly Christian ideal is rooted in the Fourth Commandment, to work, and in the Fifth Commandment, to honor your father and your mother. Paul admonished the Thessalonians, “For even when we were with you, we used to give you this order: if anyone will not work, neither let him eat. For we hear that some among you are leading an undisciplined life, doing no work at all, but acting like busybodies. Now such persons we command and exhort in the Lord Jesus Christ to work in quiet fashion and eat their own bread.” [ II Thessalonians 3:10-12 ] Also, Paul exhorted Timothy, an Elder in Ephesus, regarding widows and those in need of care, “…if any widow has children or grandchildren, let them first learn to practice piety in regard to their family, and to make some return to their parents; for this is acceptable in the sight of God…But if anyone does not provide for his own, and especially for those of his household, he has denied the faith, and is worse than an unbeliever.” [ I Timothy 5:4, 8 ] The truly biblical ideal is that we ought to labor six days in seven, and thus eat our bread; and upon the incapacity of our elderly to continue this regimen, we ought to honor them and to make a return to them. This is social security in truth.
What can be done? The conservative pundits long have been harping on the seemingly inevitable wrong-headedness and inefficiency of government programs. It is not difficult to show that money “invested” in the markets consistently yields a greater return than ever was generated by Social Security. If only the government would stop their meddling, the pundits have been saying, and leave us free to “invest” our money instead of paying it into the inefficient Social Security system, then we all would be much better off and the demographic time-bomb would be defused. However, this approach really would not solve the problem. It only would exchange one demographic time-bomb for another. Instead of worrying about whether there will be enough taxpayers to keep each retiree living well, we would then have to worry about whether there would be enough debtors to keep each retiree living well. As the current system depends upon a steady stream of workers paying taxes, so the “private accounts” approach would depend upon a steady stream of debtors paying usury.
Parenthetically, let us look at the question of the return on “investment” in stocks vs. the return on bonds and loans. Theoretically, the return on stock ownership is a legitimate and ethical business practice vs. the sinfulness of usury. However, what we have in post-modern economics is far from the theoretical purity of stock investment vs. money-lending. This is why I put the term “invest” within quotation marks. Pure investment is considered far too risky nowadays. After all, a profit is not guaranteed. Virtually all stocks and “mutual funds” these days are “hedged” with usury, whether government bonds or money-lending of one kind or another. So, regardless of whether a “private account” is “vested” in out-right money-lending or in the stock market, the return on such an account depends upon a steady stream of usury from a population of debtors. Financial counselors will tell you to avoid debt like the plague, and at the same time will tell you to go for the highest rate of return you can get. Are they really oblivious to the fact that no one can follow the second part of their advice unless many others choose to ignore the first part?
The conservative pundit’s critique of Social Security lacks usefulness simply because they fail to question the whole premise of retirement. They bewail the “welfare state” as unproductive people living at taxpayer expense. They do not challenge the basic ideal Social Security as amounting essentially to the same thing, but instead devote all of their commentary to trying to find a more efficient way of accomplishing the goal. Unproductive retirees living on usury at the expense of debtors is thought to be more principled than living at taxpayer expense only because conservatives refuse to acknowledge the illegitimacy of usury. Some might wish to draw a distinction between welfare and retirement, pointing out that the “welfare bum” is potentially productive though living off others while the retiree is old and beyond productive potential. However, this does not at all align with the ideal of retirement. The retirement ideal for which many strive is to cease productivity as soon as possible so that they have many years of health and potential productivity that they may devote instead to leisure. Conservative pundits do not challenge this ideal but instead seek more efficient ways of funding it. But in all of this they misunderstand the historical premise of retirement and the true nature of the Social Security system.
In his book A History of Retirement, William Graebner [ New Haven: Yale University, 1980, 293 pages ] explores the origins of the modern idea of retirement and of the Social Security system. He shows that the modern idea of retirement arose in the context of urbanization and industrialization in the latter part of the 19th century and was prompted by government efforts to address unemployment problems. As a result of urbanization and industrialization, combined with a series of late-19th century bank panics, there emerged a growing unemployment problem among a growing population of younger Americans. This created the social problem of how to get older and less productive workers out of their positions in order to make room for younger ones. “Retirement to the family farm was one thing; retirement to a New York City tenement another. In the urban-industrial economy of 1900, workers without savings and without community ties to reduce the anxiety of retirement clung to their positions.” [ p. 14 ] In this socio-economic context Dr. William Olser prompted general public debate of retirement with a commencement address at Johns Hopkins on February 22, 1905. He titled his address “A Fixed Period,” after an Anthony Trollope novel by the same name. The novel concerns a fictional land in which at age sixty men retired to a “college” for a year of contemplation before a “peaceful departure by chloroform.” In his address Dr. Osler suggested “the comparative uselessness of men above forty years of age,” and, “…the uselessness of men above sixty years of age, and the incalculable benefit it would be in commercial, political and in professional life if, as a matter of course, men stopped work at this age.” [ p. 4 ] He suggested that the benefits would derive from gaining the superior work of younger men and also from avoiding “…the many evils which they [ the old ] perpetuate unconsciously and with impunity.”
There was much debate generated by Dr. Olser’s remarks, which by no means garnered immediate consensus. However, the problem these remarks addressed persisted and, indeed, increased. Regardless how noble was the popular idea of the dignity and venerability of the elderly at the turn of the 20th century, it was increasingly a sentimental view disconnected from a truly Christian idea of family and culture. An interesting thesis to explore would be the relationship between the socio-economic problems at the turn of the 20th century that led directly to the modern idea of retirement and the thorough secularization of American culture that was occurring at that same time. The urban-industrial climate pressed for resolution of the employment issues it created, and re-assessing urban-industrialism was deemed out of the question. Therefore those who initially might have been shocked by Dr. Osler’s ideas were constrained eventually to embrace them. “As William Osler had so clearly seen, a society that is dedicated to progress and allows its economic institutions to define its terms must learn to sacrifice the older generation for the younger.” [ p. 53 ]
The Social Security Act came to fruition in 1935 directly as a means of addressing unemployment and general economic problems. The greatest myth of Social Security is the idea that it was designed and intended for the care and benefit of elderly Americans. Surely, this is what its name implies. And surely this is how the current population of elderly Americans have come to regard it. However, Graebner provides extensive documentary evidence to show that, “The Social Security Act was…a piece of retirement legislation which promised to accomplish what other retirement legislation had accomplished - the removal of people from the work force.” [ p. 184 ] A corollary motive of the legislation was to provide that the non-productive elderly might nevertheless continue to function as consumers. Bureaucratic ideas of retirement and the funding of retirement are grounded in, and are meant to address the problems engendered by, impersonalized, urbanized, and industrialized capitalism. The motive and the goal is bureaucratic manipulation and control of “the economy” moreso than the care of the elderly. Now, with Social Security on the brink of bankruptcy, politicians are in the delicate spot of having to deal with the issue in keeping with its original goal of manipulating “the economy” while at the same time allowing their constituencies to persist in the delusion that it all is meant for their personal benefit.
Unemployment and consumerism are problems inherent in modern capitalism and so the difficulties of retirement are not confined to government programs. Corporate pension plans find themselves in similar troubles as Social Security. Graebner argues that, “…retirement was a reaction against the continued influence of personal modes of behavior in institutions in which personal relationships were increasingly seen as dysfunctional relics of the past. To a certain extent, the application of personal qualities to business affairs is inherently dysfunctional by capitalist definitions. Employment practices should reflect economic rationality rather than priorities established by family and friendship.” [ p. 265 ] Or, as the popular slogan puts it, “Business is business.” The state of General Motors today is a good illustration of dilemmas created by capitalist manipulation. For decades General Motors cultivated a talented workforce of people - not the old-fashioned way based on the “dysfunctional relics” of “family and friendship,” but by promising them the Moon upon retirement. Today, it costs General Motors over $1500 per vehicle sold just to pay the health-care costs of their pensioners. It costs them so much to fulfill their contract with pensioners that they cannot afford to maintain current staffing levels, and recently have announced plans to lay off up to 28% of their white-collar staff. Retirement is designed as a means to get older workers out so unemployment of younger men is relieved, but now they need to lay off the younger men in order to continue to afford what was promised to the older men. And the old way of small communities, agrarianism, and personal relationships is called “dysfunctional”!
Christians are too quick to embrace Conservatism as the champion of “family values.” There is no true family value in the “Social Security” system or in the current idea of retirement. Yet instead of working toward a truly Christian idea of family values, Conservatism is interested only in making some adjustments to the system in attempt to save it. The truly Christian ideal is rooted in the Fourth Commandment, to work, and in the Fifth Commandment, to honor your father and your mother. Paul admonished the Thessalonians, “For even when we were with you, we used to give you this order: if anyone will not work, neither let him eat. For we hear that some among you are leading an undisciplined life, doing no work at all, but acting like busybodies. Now such persons we command and exhort in the Lord Jesus Christ to work in quiet fashion and eat their own bread.” [ II Thessalonians 3:10-12 ] Also, Paul exhorted Timothy, an Elder in Ephesus, regarding widows and those in need of care, “…if any widow has children or grandchildren, let them first learn to practice piety in regard to their family, and to make some return to their parents; for this is acceptable in the sight of God…But if anyone does not provide for his own, and especially for those of his household, he has denied the faith, and is worse than an unbeliever.” [ I Timothy 5:4, 8 ] The truly biblical ideal is that we ought to labor six days in seven, and thus eat our bread; and upon the incapacity of our elderly to continue this regimen, we ought to honor them and to make a return to them. This is social security in truth.
