Michael Lind: Happy Birthday, Social Security!
[Michael Lind is Policy Director of the Economic Growth Program at the New America Foundation.]
On Saturday, Aug. 14, Social Security celebrated its 75th birthday. For three-quarters of a century, America’s most successful social program, signed into law by President Franklin Delano Roosevelt during the depths of the Depression, has helped Americans in multiple ways.
By providing a guaranteed income to all Americans in retirement, Social Security has made utter destitution among the elderly all but forgotten, like the poorhouses for the old that 21st-century Americans know only from history books. By lessening the burden of caring for their aged parents, Social Security has freed American families to invest more in their children.
Social Security has important macroeconomic functions as well. During economic downturns like today’s Great Recession, it acts as an automatic stabilizer, slowing the collapse of aggregate demand. And in good times as well as bad, by contributing to the purchasing power of the elderly, Social Security helps to maintain the mass consumption on which a modern industrial economy depends.
Social Security’s contributions to deficits in the future are minor and easily corrected. The main long-term threat to the economy comes from healthcare costs, private and public, which are much higher in the U.S. than in other industrial democracies. The solution is all-payer cost control -- setting medical prices by negotiation between the government and providers. This will require the elected representatives of the American people to end the gouging of American businesses and consumers by greedy pharmaceutical companies and hospitals and overpaid doctors. The only other alternative to national bankruptcy is rationing, which would force Americans to receive less healthcare at excessive prices, instead of the same amount of healthcare at lower prices comparable to those in Canada, Europe and Japan....
Read entire article at Salon
On Saturday, Aug. 14, Social Security celebrated its 75th birthday. For three-quarters of a century, America’s most successful social program, signed into law by President Franklin Delano Roosevelt during the depths of the Depression, has helped Americans in multiple ways.
By providing a guaranteed income to all Americans in retirement, Social Security has made utter destitution among the elderly all but forgotten, like the poorhouses for the old that 21st-century Americans know only from history books. By lessening the burden of caring for their aged parents, Social Security has freed American families to invest more in their children.
Social Security has important macroeconomic functions as well. During economic downturns like today’s Great Recession, it acts as an automatic stabilizer, slowing the collapse of aggregate demand. And in good times as well as bad, by contributing to the purchasing power of the elderly, Social Security helps to maintain the mass consumption on which a modern industrial economy depends.
Social Security’s contributions to deficits in the future are minor and easily corrected. The main long-term threat to the economy comes from healthcare costs, private and public, which are much higher in the U.S. than in other industrial democracies. The solution is all-payer cost control -- setting medical prices by negotiation between the government and providers. This will require the elected representatives of the American people to end the gouging of American businesses and consumers by greedy pharmaceutical companies and hospitals and overpaid doctors. The only other alternative to national bankruptcy is rationing, which would force Americans to receive less healthcare at excessive prices, instead of the same amount of healthcare at lower prices comparable to those in Canada, Europe and Japan....