Will Social Security Survive Our National Debt - Part 2 - The View From the Top

Because of the size of the Baby Boomer retiring generation we are near the point where Republican's have always maintained the Social Security Trust Fund would run out of money.

There is a kernal of truth to this notion.  Social Security began as a sort of ponzi scheme, government had no money in the midst of the Great Depression to create a fund to start paying social security for old folks, so they funded payments to old retired people from payroll taxes on people still working, which has been the basic scheme ever since.  So a generation with fewer workers and more retired folks drawing social security faces a challenge to fund the program.  So Republicans think we should therefore let the program sink into oblivion.

This is a perfect example of the fundemental flaw in Republican ideological belief driven by their view from the top of society.

Here is a little history snippet that demonstrates the fallacy.  From the end of the Civil War through 1932 Republican economic theories dominated.  Governments role was to help business and otherwise stay out of the way.  In that period as a country we endured a depression on average every 6 or 7 years, with a sprinkling of recessions in the periods between depressions.   

Since the enactment of the Social Security Act in the 1930's there has not been a single depression, and recessions have been relatively rare.  Hmmm, I wonder why.

Perhaps government programs like Social Security, Unemployment Insurance and Disabilty Insurance provide a floor under consumption?   When the private sector world is in a panic about economic conditions and afraid to spend money because they may lose it, those "entitlement" folks just keep on spending as they normally spend.

But what about the fact the bean counters say the Social Security Trust Fund doesn't have enough money?  The view from the top led Republicans to believe the way to build a good economy is to shower benefits on the wealthy which they have done for the last 40 years with tax cuts, tax deductions etc.  The result has been to the extent the economy developed new wealth it went to rich folks who pay very little into the social security trust fund.  Meanwhile the workers whose payroll taxes support the trust fund have endured stagnant wages for 40 years.  So the Social Security Trust fund has been on a starvation diet from misguided policy.

Entitlements are not simply a benefit to the folks who receive them.  They benefit the entire economy.  History has demonstrated that, like a sailboat without a keel, an economy without a base of support will constantly capsize and end up dead in the water.  Insuring that base of support continues is an investment, not a handout.