Before the 1930s, financial support for the elderly was a local matter instead of a government issue. Except for veterans state and family members cared for the elderly rather than the federal government. But due to the overwhelming suffering caused by the Great Depression, proposals for a national old-age insurance system sprang to light. And on January 17, 1935, President Franklin D. Roosevelt asked Congress for a Social Security Legislation. Encountering oppositions from those in congress who considered the Social Security Act a government invasion into the private lives of the American people.
The Social Security Act however passed on August 15, 1935, when FDR signed it into law. This act was to provide pensions for the care of the old-aged, funds to assist children, the blind, and unemployment; to institute vocational training programs; and to provide family health programs. This program was unlike many in the European nations because it was not supported solely by the government, but from contributions of taxes from individuals wages. The government however did promise to keep the taxes that were withheld for Social Security low. Boy, if we had a nickel for every time we heard a “promise” from the government, we wouldn’t need Social Security.
At first the Social Security Act was introduced as a voluntary program. Meaning if one didn’t want to be enrolled into the Social Security program, they didn’t have to, it was solely up to the individual. And the government did honor their promise and only a small amount was deducted from wages, (at first). But the Social Security Administration boomed quickly into an enormous agency that began transferring huge amounts of money into the welfare programs brought forth by the “New Deal”. Then the government made Social Security mandatory for workers. It was no long a voluntary program, because the government was funding other agencies with the vast amounts of Social Security coming in from the public. So instead of saving the Social Security money for its original intent, the government used the funds to pay for welfare programs. The government had found its funds to keep the “New Deal” afloat.
Well here’s that nickle of promise with some Social Security knowledge: In 1963, the Medicare Insurance Plan financed through the Social Security was submitted to Congress by President Kennedy. In 1977, Legislation authorized a Social Security tax increase that was signed by President Carter. The cost to workers and employers was $227,000,000,000. over the next ten years. In 1983, changes in the Social Security system was to produce $168,700,000,000. by 1989, to make the system solvent. It included a tax increase and a reduction in the growth rate of benefits, as with raising the retirement age, and it was signed by President Reagan, (Reagan-nomics). In 1997, a federal advisory group recommended investing part of the Social Security revenue into the stock market instead of solely in government securities. The panel however could not decide or agree whether the workers or the government should decide on how to invest the money. Coming to no conclusion.
The Social Security for decades was an agency connected to the Welfare System, but now the Social Security is an independent agency. And due to be broke as of 2012. This plan worked out well. But my question is, the tax payers invested huge amounts of money into the Social Security system, so where did all the money go?