Has Social Security been good for the country? Has it kept the elderly out of poverty?
Soup Kitchen in Washington D.C. in 1936. This image, among many others, was shown in the 1930s to demonstrate the crisis that prompted new programs like Social Security.
Public domain photo from Wikimedia Commons.
Has Social Security been good for the country — or is it a “crumbling monument to the failure of the New Deal,” as Republican presidential candidate Rick Perry wrote in his 2010 book, Fed Up?
Almost nine of ten Americans (87 percent) say Social Security has been good for the country, according to a Pew Research Center poll in June this year. About the same proportion (88 percent) say Medicare has been good for the country, with 77 percent saying Medicaid has been good as well. Do you agree?
While most Americans say Social Security has been good for America, most also say that its finances are troubled and a fix is needed. Consistent with the Washington Post-ABC News poll I cited yesterday, Pew finds that most Americans don’t want a cut in benefits. Sixty percent say keeping Social Security and Medicare benefits intact is more important than reducing the budget deficit.
But there is a curious split among Republicans. Those who are relatively affluent think that reducing the budget deficit is more important than keeping benefits intact, while those with lower family incomes say the opposite. Democrats, however, don’t have the same split: Richer and poorer Democrats say that maintaining benefits is a top priority. In a rare coincidence, Democrats and low-income Republicans agree that keeping benefits as they are is important.
Has Social Security kept the elderly out of poverty?
After he retired, my father depended on monthly Social Security checks to support himself. These payments helped him to live independently for more than a decade after retirement. For him, independent living was important.
But that, as we say in social science research, is a sample of one. What do we know about the elderly, poverty and Social Security? Assessing the effect of Social Security on poverty is complicated for several reasons. Different Social Security rules apply to different birth cohorts. When benefits are generous, people may work and save less than when they are not.
Happily, economists at the National Bureau of Economic Research know how to take all these complications into account. Here are some of their key findings.
Every increase of $1,000 in Social Security benefits causes a 2 to 3 percentage point drop in poverty rates for elderly households.
Elderly households with higher incomes and lower incomes benefit similarly from increases in Social Security. In other words, Social Security does not increase inequality.
Increases in Social Security benefits explain all of the decline in poverty among the elderly in the years they examined.
Social Security helps more elderly Americans to live independently — just as my father did.
These facts and figures lend numerical support to the conclusion that most Americans have reached: Social Security has been good for the country. As I discussed this week, 87 percent of Americans believe this to be true.
I don’t know if Social Security will be there for me as it was for my father, but I believe generations have moral obligations to care for one another, and I am happy to pay my share of Social Security contributions.
Tell us your story in a comment, please.
What has Social Security meant to you and your family?
Do you agree that Social Security has been good for the country?
Do you agree that it’s in need of a big fix?
Originally published at www.OurValues.org, an online experiment in civil dialogue on American values.
Dr. Wayne E. Baker is a sociologist on the faculty of the University of Michigan Ross School of Business. Baker blogs daily at Our Values and can be reached at ourvaluesproject@gmail.com or on Facebook.
Comments
Tru2Blu76
Sun, Sep 18, 2011 : 5:44 a.m.
Both as an individual of (qualifying) retirement age and as one who tries to keep abreast of over-view issues like this: I see positive benefits for the American economy as well as benefits for people's psyches. We, I believe, have had far too much of the "lets adore the rich" and "lets endlessly admire the risk takers" force fed into us over the past 20 years. Lets instead be realistic: over 70% of U.S. economic activity is consumer (wage earner) driven. Lets also be realistic in our assessment of what works best in people's minds. I vote for - a sense of security which provides the platform for planning one's own life and the lives of whole families. No, I never believed Social Security payments were meant to constitute all income after one retires. That has never been the claim. I personally work part-time: willingly and happily, to reach just below U.S. median income. I'm still in my 60s, I have medical expenses I could not meet without some assistance (the alternative is deep poverty until I die). As for the "trouble" Social Security is facing: it's a matter of record that Congress has taken funds from Social Security amounting to hundreds of millions of dollars: to achieve a FALSELY balanced federal budget. Congress must be compelled by the people to restore all funds they "borrowed" in past years. Those who were members of Congress when they pilfered this money should face criminal charges, including large fines and suspension of their over-generous congressional benefits package. Former Gov. Rick Perry: has the audacity to actually bid for presidential candidacy. That fact alone tells us how dangerous is the country we live in and once trusted.