On the following pages you will find the introduction to my book, Social Security? What's In It For You. It is being provided on my web-site to give you a feel for the rest of the book. If you are currently receiving Social Security benefits or plan to in the future, you must read this book. As a nation we must not let the debate about this topic cease to exist. For a limited time we are making a special offer to purchase this book. Click here for details. Ethan Pope
Social Security? What's In It For You
Has America lost her financial conscience?
On August 14, 1935, President Franklin D. Roosevelt signed into law one of the most historic pieces of legislation in our nation's great history: the Social Security Act of 1935. From just over 200 thousand in 1940, the number of beneficiaries has grown to almost 50 million in 2005. Millions of American workers, spouses, and their children have benefited over the years from this momentous legislation.
How did it come about? As a nation we had moved from the prosperous and partying roaring twenties abruptly into the Great Depression of the thirties. Our banking system collapsed in 1933 when millions of panicked Americans rushed to their banks to withdraw all their savings.
It came at a time when more than 14 million Americans were unemployed. People were beginning to lose hope. The American dream had turned into the American nightmare because of the stock market crash, the great depression, unemployment, the banking collapse and hopelessness.
Some children watched their parents dig in garbage cans to find scraps of food to feed their family. Homes were being foreclosed. Farms that had been in the family for years were being sold or foreclosed. And many senior citizens, who had worked hard their entire life, lost everything and were left literally penniless. For a good idea what life was like for many families during these years, rent the recent film Cinderella Man, the story of prize fighter Jim Braddock. The heavyweight contender fed his family watered-down milk and razor-thin deli meat, and later told reporters he fought so he could buy milk for his family. It was not a proud moment in American history, but a painfully sad moment.
Courtesy of Social Security Administration
In his inauguration speech in 1933, President Roosevelt determined to renew America's hope. He proclaimed to the nation, "The only thing we have to fear is fear itself." He also pledged that no American would go hungry.
A New Deal: Social Security
President Franklin D. Roosevelt believed the citizens of this great nation needed a "New Deal," and he was determined to deliver. And deliver he did. The Social Security Act was just one aspect of President Roosevelt's New Deal.
On August 14, 1935, when President Roosevelt signed into law the Social Security Act, he said, "We can never ensure 100 percent of the population against 100 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 his family against the loss of a job and against poverty-ridden old age."
Courtesy of the Social Security Administration
President Roosevelt wanted to build what he called a "safety net." His goal was to insure that every senior citizen could live above the poverty line. The initial Social Security Act paid retirement benefits to the primary worker and established a national unemployment compensation program.
Ending Poverty for the Elderly
This Landmark legislation helped to shape the overall economic landscape of our nation. When the Social Security Act was passed, an estimated 50 percent of senior citizens were living in poverty. The intent of Social Security was to prevent poverty at these levels from ever happening again. Now, seventy years later, that number has dropped to about 10 percent. It is estimated that without Social Security today, once again 50 percent of our nation's elderly would be living in poverty.
Many believe the Social Security Act of 1935 was the right thing to do at the time. Others argue it set our nation on a path of uncontrollable social welfare and bigger government—that we have yet to overcome.
Today one in six Americans receives a check every month from the federal government more than 47 million people in 2004! That number is expected to reach almost 69 million by 2020.1 One side sees these numbers as a great American success story, while the other side sees this as a government program out of control.
As our nation has aged, so has Social Security. On August 14, 2005, Social Security will celebrate its seventieth birthday. Along the way its has been revised and expanded, even adding medical coverage under the important (yet endangered) Medicare plan.2 Just as many Americans begin to experience challenges in old age, we are finding that Social Security is no exception.
Financial Alert, Alert, Alert
Here are six of those challenges:
- In only forty-five years (2050) Social Security and Medicare will consume 67 percent of the federal budget, according to Congressional Budget Office projections. The CBO projects other trust fund programs will consume 8 percent. This only leaves 25 percent of revenues available for other purposes.3
- As of 2005, the Social Security program has a $4 trillion gap between "funded benefits" and "promised benefits" over the next seventy-five years. That means in addition to the collected payroll taxes, our government needs to come up with $4 trillion over the next 75 years.4 (This number is in 2004 dollars)
- If we use an infinite horizon in our projections, the Social Security program has a $11.1 trillion shortfall between "funded benefits" and "promised benefits."5
- The federal government owes the Social Security Trust Fund $1.7 trillion dollars. This is money taken out of the trust fund and already spent on other government programs. (More on the infamous trust fund in chapter 4.)
- The problems with Social Security, Medicare, and the national debt threaten the long-term financial solvency of our nation.
- America is losing her financial conscience. American is quickly losing her financial alertness. America is charting a path of unsustainable spending, increasing entitlements, escalating debt, and greater than ever taxation.
It does not matter how much of an optimist you are; we are a nation destined for a disaster, unless we change our course—and the sooner the better. Some might reject my analysis, but we are approaching a point of no return and the consequences will make the Great Depression and the more recent events of 9/11 (the 2001 terrorist attacks on New York and Washington) pale in light of what is to come.
Unless we can begin charting a new course, our nation as we know it, will no longer exist. Our economy will stagnate, our lifestyle will be diminish, our educational system will deteriorate, and our national security will weaken.
Don't just take my word; read what David M. Walker, the comptroller general of the United States of America, is saying, "Continuing on our current unsustainable fiscal path will gradually erode, if not suddenly damage, our economy, our standard of living, and ultimately our national security."6 Speaking before the House of Representatives' Ways and Means Committee, Walker concluded, "Failure to address the Social Security financing problem will, in combination with other entitlement spending, lead to an unsustainable burden on both the federal government and, ultimately, the economy."7 Mr. Walker is a highly qualified financial expert who knows what he is talking about.
Yes, major problems are on the horizon. However, there are solutions to every problem our nation is facing – including Social Security, Medicare and the national debt.
A Book to Educate
And Change a Nation
When Moody Publishers asked me to write a book on Social Security, I took their assignment very seriously! I believe this book can not only help to educate a nation about Social Security, but I believe this book can (1) change a nation, (2) influence individuals, and (3) financially impact generations to come.
Will you let me be your financial pastor for the next few hours? And after you finish reading this book, if these words ring true, would you help me deliver an important word to America by spreading this message of warning and of hope?
As a nation, we need to pray, call out to God, be active in our government, and take personal responsibility for the direction of our nation and our personal lives. As a people, we cannot always depend on our government to take care of us – nor in my opinion should we.
Social Security is not really about accounting procedures, but is about (1) addressing our fundamental values as a nation, (2) sounding an alarm, and (3) exhorting Christians to begin taking personal responsibility!
Many people are feeling somewhat insecure about Social Security. The world in which we live is full of insecurity, but from a biblical perspective, authentic security comes from but one source: God.
As believers, one of our God-given responsibilities is to be on the alert. Webster defines alert as: "watchful and ready, as in facing danger."8
This book is a specific call for Christians to be on the alert and to provide key facts, tables, charts, potential solutions, and Biblical perspective on the topic of Social Security.
In the following chapters I will be answering the essential questions we all need to be asking:
- Are there valid reasons we should feel insecure about Social Security?
- What am I not being told that I need to know?
- What went wrong—or did it?
- How much money actually remains in the Social Trust Fund?
- How can we save Social Security?
- Will private accounts help to permanently solve the problem?
- Are there any new ideas we should consider?
- What is the biblical response to Social Security?
- What should you be doing to prepare for the future?
My challenge to you is simply this. Read this book. In fact, study it. Become familiar with what is going on in our nation. Then, will you help me to get this important message out?
As Americans, we have the greatest potential of any nation in the world to use our resources for good. Christians in the United States have so much potential to play a significant role in helping reach the world for Christ. However, if our nation stumbles or collapses financially, our potential to use our vast resources for good will vanish forever—a lost opportunity.
We cannot let that happen.
We must ACT NOW. The longer we delay in addressing Social Security, Medicare, deficit spending, and our growing national debt, the greater the consequences to come. By the way, as you will learn in this book, all four of these issues are intricately connected to each other.
In response to the challenging problems and insecurity our nation is facing, I offer you my second book in the Financial Alert Series: Social Security.
To purchase book click here.
- Government Accountability Office, "Social Security Reform: Early Action Would Be Prudent" 9 March 2005, report GAO-05-397T, 2; www. gao.gov/news.items/ d05397t. pdf
- Medicare has its own separate fund but is considered part of the Social Security plan. As such, this program is actually in more financial trouble than Social Security.
- Congressional Budget Office, "The Impact of Trust Fund Programs on Federal Budget Surpluses and Deficits," Long Range Fiscal Policy Brief, No 5., 4 November 2002, November, 4, 2002; www.cbo.gov ("Frequently Requested: CBO Briefs").
- Social Security Administration, "2005 Annual Report of the Board of Trustees of the Federal Age-Old and Survivors Insurance and Disability Insurance Trust Fund,"56; www.ssa.gov/OACT/TR/TR05
- Ibid, 58.
- Government Accountability Office, "Social Security Reform," report GAO-05-397T, 1.
- Ibid., 5.
- Webster's New World Dictionary of the American Language, 2nd college ed., s.v. "alert."
© copyright - 2007, Ethan Pope