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Social Security’s problems are simple arithmetic

Lead Summary
By Jim Thompson
HCP columnist

In the middle of the Great Depression on Aug, 14, 1935, the U.S. Social Security Administration was founded. Its goals were simple. It was to be a backstop to citizens’ own means of taking care of themselves in retirement.

At the time it was founded, 56 percent of the jobs in the United States were covered. Today, that number is 94 percent, with the balance being the Railroad Retirement Board, state administered systems run by school boards and so forth.

Social Security was on fairly stable fiscal ground when founded. But look what has happened since then. Families have gotten much smaller, reducing the number of future contributors to Social Security. Abortion has taken around 60 million future Social Security contributors out of the system.

Then, benefits and expectations have expanded through Medicare (actually a separate, but adjunct system) and also through the Supplemental Security Income program, added in 1972.

Simply, the number of people paying into the system has been declining – on a percentage basis – for decades. Meanwhile, the number of people eligible to receive benefits has expanded.

As a country, we have just a few choices.

First, we can let the system run out of money and catastrophically fail. This seems to be the plan of the Biden Administration – kick the can down the road.

We can raise the retirement age, prolonging the day that an individual first receives benefits.

We can increase the Social Security and Medicare taxes withheld from everyone’s income.
That’s it: reduce benefits or raise taxes. That is as long as we stay with the current scheme.

Sweden has done something different which we should seriously consider. Sweden has moved from a defined benefits plan, like we have to a defined contribution plan. In a defined contribution plan, one receives their monthly check based solely on what they personally have put into the system over the years. This is what has happened to many private pension plans over the last couple of decades.

You can bellyache about this, but these are the choices. We can make money out of thin air, but that is inflation. Ask the citizens of Brazil and Argentina how much fun rampant inflation can be. Restaurant menus and transit system prices change daily, I kid you not.

There is another path that many don’t like. It is the one I have taken. I have never retired. Yes, I take Social Security, but I pay in about half of my Social Security check each month in new taxes based on my current income.

By the way, there is yet another reason I have not retired. I don’t think it is Biblical. Name me one person in the Bible who retired. Yes, there are some who became old and feeble and their families took care of them in their last days, but they never retired as long as they were able to work.

Retirement is a modern day invented privilege that more and more it looks like we can’t afford.

Jim Thompson, formerly of Marshall, is a graduate of Hillsboro High School and the University of Cincinnati. He resides in Duluth, Ga. and is a columnist for The Highland County Press. He may be reached at

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