Despite the increases, HEW Secretary Joseph Califano has admitted that the present tax rate is only temporary. It will, at best, keep the system solvent only until the year 2000, assuming that birth rates are as high as the Social Security actuaries predict (they are, in fact, much lower) and that price inflation is held to 4% per annum (it is, of course, presently far higher). In short, Califano's "pessimistic" prediction is woefully optimistic!
The most honest assessment of what is coming as a result of Social Security's expenditures was made in 1976 by Sen. William Proxmire. He had an exchange with James Cardwell, the head of the Social Security program (he retired in mid-1978). l need only reproduce this exchange verbatim to give you the picture:
PROXMIRE: There are 37 million people, is that right, that get social security benefits.CARDWELL: Today between 32 and 34 million.
PROXMIRE: I am a little high; 32 to 34 million people. Almost all of them, or many of them, are voters. In my State, l figure there are 600,000 voters that receive social security. Can you imagine a Senator or Congressman under those circumstances saying, we are going to repudiate that high a proportion of the electorate? No. Furthermore, we have the capacity under the Constitution, the Congress does, to coin money, as well as to regulate the value thereof. And therefore we have the power to provide that money. And we are going to do it. It may not be worth anything when the recipient gets it, but he is going to get his benefits paid.
CARDWELL: I tend to agree.
In case you think I am making this up, you can check it out: The Social Security System, Hearings Before the Joint Economic Committee of the United States, 94th Congress, 2nd Session, May 26, 1976, pp. 27-28 (Washington: Government Printing Office, 1977).
You have now been warned.
There is a marvelous aspect of the creation: God's moral laws serve as the foundation of cause-and-effect relationships in human action. When men continually violate basic principles of moral action, they or their heirs reap the whirlwind. We have allowed the substitution of a bureaucratic State "charity" system for the old system of family and church charity. We have violated biblical law. We substituted compulsion by an impersonal bureaucracy for loving, responsible care for our neighbors. We led people to believe that Social Security, was a true insurance scheme, rather than a massive compulsory wealth-redistribution scheme. We led people to believe that the bureaucratic "family" would take care of them, as if it were a real family. Now the enormous bills are coming due. We will see how well the hedonistic, present-oriented younger workers respond to this statistical challenge. I think Proxmire has seen the future: total inflation of fiat money, and the destruction of our currency.
How far in the hole is the system? Dr. Rita Ricardo Campbell in 1977 estimated that it may be as high as $17 trillion over the life of the program. This was before the huge tax increases were legislated. Now the deficit may only be a mere $6 trillion or $8 trillion, if prices only rise at 4% per annum.
As the figures on the next page demonstrate, the big jump came in 1973. It has snowballed ever since. The tax will reach a staggering combined payment (employer and employee) of $4,544 on the top income level (if two family members work, then the total tax burden could actually hit $9,088). The employee is not allowed to deduct his half, $2,272, from his Federal or state income taxes, either. Who will escape? If the law is not changed, these groups: all Federal employees, including Congressmen and Senators who voted to create this nightmare; ministers who opt out of the system within the first 24 months after their ordination; state and local government employees who are not in the system; and employees of non-profit organizations whose directors have been wise enough never to have signed up for the tax. But you, my friend, are trapped. if you are relying upon Social Security payments to get you through your "golden" years, you had better rethink your future. If you are under age 55, you had better understand the rip-off that your parents and possibly grandparents supported at the voting booth. Like the Egyptians of Moses' day, who were spoiled of their wealth by the Hebrew slaves, penalties for the sins of the fathers are now coming home to the sons, compounded annually for two generations.
Biblical Economics Today Vol. 1, No. 5 (October/November, 1978)
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