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For the historians among you, this week marks the 75th anniversary of the delivery of the first Social Security check. The program became law in 1935, began collecting taxes in 1937, and started delivering benefits in 1940. The recipient of that first Social Security check was Ida Mae Fuller of Ludlow, Vermont. Social Security turned out to be a very good deal for Ida Mae. Social security taxes were very low (a maximum of $60 per year) and she only worked for 3 years after the payroll tax began. She ended up paying just $24.75 in taxes. Even better, she lived to be 100, ultimately collecting $22,888 in benefits. That’s a heck of a return!
Unfortunately, the program will not be such a good deal for today’s young workers, who will be lucky to get back what they pay in, let alone a big return. Certainly, they will get back far less than they could earn from investing that money privately.
Moreover, Social Security, and its $24.9 trillion in unfunded liabilities, is, along with Medicare, one of the biggest drivers of our future debt. Young people will be paying that off too. Let’s put it bluntly, unless Congress does something to fix Social Security (and Medicare), young people are screwed.
To celebrate this unhappy anniversary, I published two columns this week. The first for Vice News:
and the other for Reason.com