Happy Birthday--Social Security

President Obama signed a proclamation congratulating Social Security on its 75th Anniversary this month. We've written a number of posts the past two years on our view about social security and how very unrelated it is to anything having to do with our national debt. In fact, Social Security is our number 1 national creditor, holding over twice as much of our debt as China.

From an administrative point of view, there are few social programs in the world that have an overhead rate of 1.8% and have delivered the goods for millions upon millions on people. By all objective accounts Social Security is one of the most successful social programs on Planet Earth. It is in fact one of the social welfare net that we actually do better than the Europeans and Canada.

We have heard the President say that all it needs is to be tweaked and it will last another generation. That is true and even the Catfood Commission said as much. One can raise the FICA cap as Reagan did or the tax as Reagan did also. There are a combination of solutions that will ensure that Social Security will pay out 100% of benefits through and beyond the next generation.

I personally favor lifting the cap and lowering the FICA tax rate, which would make SS last until the mid-22nd century. I do not favor increasing the age limit because those most in need are blue collar workers who are not employable in their mid-60s.

But there are ideological threats to Social Security, which showed up in force after the 2010 mid-term elections. These threats will be present in the negotiations at the Congressional Supercommittee so be alert.

But Happy Birthday, Social Security. Long May You Wave.