It’s no secret that future social security funds are fast-depleting, with speculation by some experts that the program will be a thing of the past after the influx of baby-boomer era retirees take their piece of the pie. There are plenty of other factors at play. According to the Social Security Administration (SSA), “there have been 11 years in which the Social Security program did not take enough in FICA taxes to pay the current year’s benefits.
During these years, Trust Fund bonds in the amount of about $24 billion made up the difference.” The recession of the past few years sure didn’t help either. Government reports issued in 2009 indicated 2037 as the year that Social Security funds as we know it will be tapped, four years earlier than pre-recession projections.
But, economist Allen W. Smith, Ph.D. and author of The Looting of Social Security believes there is a face to the problem. He identifies the face to blame as that of Alan Greenspan, former Fed chairman. According to Smith, “Greenspan was instrumental in getting the 1983 payroll tax hike enacted into law, and he then watched silently as the Reagan administration siphoned the surplus revenue into the general fund, where part of it was used to replace the lost revenue resulting from the unaffordable Reagan income-tax cuts.” In a bit of a “woulda-coulda-shoulda” rationale, he maintains that had Greenspan made the real figures behind the tax cuts public knowledge, they’d never have been enacted.
If you’re too young to recall or have forgotten what the gilded age of 80s greed looked like, brush up on your financial history and watch the original “Wall Street.” Would the masses really have cared why or how their taxes were being lowered at that point in time? We’ll never know.