Wednesday, August 29, 2012

Social Security - Unintended Consequences

Its amazing the unintended consequences caused by our erstwhile political leaders.

In 1937 when Social Security was enacted as a supplemental retirement fund by our political leaders the average mortality for the American male was 67 and a half years.  In their infinite wisdom the political leaders set the retirement age at 65 fully expecting that on average retired male workers would "croak" at age 67 and a half, and therefore not much would be withdrawn from the Social Security so-called "lockbox".  However, in their infinite wisdom they never considered that over the next 75 years the average male mortality would increase to age 72 due to better health practices and advancements in medical science putting greater stress on the fiscal soundness of the Social Security retirement fund.

Also, the fund unexpectedly grew faster and much larger than initially intended.  Thus, the greedy politicians couldn't keep their grubby hands out of the till.  They tapped the fund for other unrelated social programs bleeding it to the point of near deficit.  Now they're tinkering with the idea of increasing the retirement age to 70 to extend the life of the Social Security program.

So, what will be the unintended consequences in the next several years?  It's enough to make younger workers very nervous.  

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