What the GOP Candidates Don’t Understand: Hitler Ruined Social Security
The GOP blames the welfare state for the impending insolvency of Social Security. They should blame Adolf Hitler.
The current crop of GOP Presidential candidates are threatening the future of one of the hallmark achievements of the 20th century for the left. That would be entitlement programs, and most specifically, Social Security. Romney, Gingrich, Santorum, Huntsman, all correctly agree that Social Security will soon be insolvent, and all propose a radical change to either the public nature or benefits that Social Security pays, if it should remain at all. Romney has said about entitlement programs, “The plan I propose to make government simpler, smaller and smarter represents the biggest fundamental change to the federal government in modern history.” The Republicans view the coming insolvency of Social Security as a consequence of the failure of the modern welfare state, but in this they are mistaken. The problem of Social Security comes from the demographic bulge known as the baby boom, and for this we have to thank that destructive old goat, Adolf Hitler.
The head of the National Socialist German Worker’s Party initiated the invasion of Poland on September 1, 1939, setting into motion a string of events which would have devastating and far reaching consequences. Some events have more distance between cause and effect, but stem from his actions nonetheless: the division and reunification of Germany, the founding of the United Nations, the state of Israel, the Marshall Plan, the end of the British Empire, the Baby Boom generation.
The consequences of this last one, the baby boom, is about to change society in a big way. An estimated 77.3 million Americans were born in the post-WWII years, producing a tremendous demographic bulge, which is now getting pretty old. The aging of the baby boom generation can be seen not only in the fact that bands like The Who, The Rolling Stones and others of their time are becoming increasingly decrepit when we see them on television (it seems most frequently to be when they’re playing the halftime show of the Super Bowl), but also in the 10,000 workers retiring every day.
2011 was marked in part by the political fiasco around the issue of raising the debt ceiling. In August, the country was nearly brought to a standstill when Congressional Republicans demanded spending cuts in exchange for increasing the nation’s debt ceiling. The ensuing political showdown led to Standard and Poor’s credit rating agency downgrading the United States’ credit rating to AA+ for the first time in the history of credit ratings. One of the reasons behind S&P’s decision was the specter of continuing dysfunctional behavior among legislators. This reason seemed at the time to be a weak one to many people, but as the cost of Social Security continues to rise and the ratio of contributors to beneficiaries continues to fall, the issue of entitlements will take on a larger and larger importance, and as long as Congress remains as ideological as it is, the problems are deep enough that we can expect more such showdowns.
When the Social Security Administration was founded in 1940 there were 159 workers for every beneficiary. That fell quickly and by 1950, when everyone was home from the war, the ratio was 16.5:1. In 2010 the ratio dropped under 3:1 for the first time in its history, now standing at 2.9:1. By 2017 the payroll taxes that constitute the funding for the program will cease to cover the rising cost of benefits. The costs can be covered until 2041 however, because of the Social Security Administration’s trust fund.
There are two solutions to the problem: raise revenues, or cut costs. The parties can dig into their traditional positions, which especially in light of the current usage of filibuster rules will result in more deadlock, or they can compromise and change the structure of the program. Given the budget constraints, something will have to give.
The way the political trends appear to be moving, with size of the deficit and debt, the future looks like it contains budget cuts and benefit reductions. In Europe, where the issue of public debt has already spread to levels of near-catastrophe, the idea of the idea of austerity has taken firm hold, perhaps providing a precedent for our country. Austerity with regard to Social Security can mean several things, the size of payments will fall, age of retirement will get higher, benefits will be privatized, or the system will be scrapped altogether.
The grim future of Social Security means that the experiment in social welfare that helped characterize liberal democracy in the 20th century, one of the successes of the non-communist left, will fall by the wayside or have disappeared altogether by the middle of the 21st century. This would be welcome news for Romney, Gingrich, et al., but they are mistaken in blaming Social Security itself for being unsustainable. For that we have one man in particular to blame.
We thought we had beaten him in 1945, but his capacity for destroying things lives on.
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