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January 07, 2005
Ronald Reagan Saved Social Security
FDR created social security--and Ronald Reagan saved it...
Hard to remember but when social security was supposedly facing a financial bind, back in the 1980's, Reagan made a deal with Tip O'Neill (then-Speaker of the House in the days when Democrats still controlled Congress): no benefit cuts and a hike in taxes.
True, it was a hike in the payroll tax, which meant workers ended up shouldering a big part of the burden. But, on the other hand, the hike happened under the paragon of Republican conservatism. Obviously, the political environment is different--Republicans now run the government whereas Reagan had to make deals with Democrats. But, the point is: with no upheaval in the basic principles of the system (i.e., no one handed over billions of dollars to Wall Street for the so-called private accounts), the funding for social security was increased and its continued health guaranteed for many years.
January 7, 2005 in Economy | Permalink
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You can find the speeches that Ronald Reagan, Tip O'Neil and Howard Baker gave when the Social Security Amendments Act was signed on April 20, 1983, here:
http://www.youtube.com/watch?v=0-91W5LS0E8 (Part 1)
http://www.youtube.com/watch?v=JCDjqy5_V2w (Part 2)
Unfortunately, somebody seems to have borrowed all the money in the Social Security Trust Fund, and (in President Bush's words) replaced it with a file cabinet full of IOUs.
Posted by: Franklin8491 | Mar 12, 2007 4:31:43 AM
This is the same part of deals struck in 1983 that Reagan later came to regret. The overiding deal was that real dollars and the standard of living could go up for Americans if the Congress would hold back spending. The rationale was that every dollar that was not spent was worth many more in the value of the US dollar.
Obviously, Congress can and will never voluntarily quit spending for any period of time. Reagan told Bob Dole that he would never make such deal again nor trust Congress to cut spending. He did not do that and taxes were not increased the rest of his time in office. It was not until George H.W. Bush increased taxes in the same type of deal in the middle of his term that this once again caused a recession.
The practical side of the matter is that savings in the private market return far better solutions in the long term, even with recessions, that letting a congressman spend money that the country doesn't have by selling the country to China, as Hillary put it, by issuing bonds and continuously raising the debt ceiling..all of which are destroying the US dollar.
Posted by: Michael | Dec 11, 2007 12:35:25 PM
when reagan made changes in social security i was one
that was dropped from getting it.now i'm trying to get
social security they say i can't.i want my regular
social security.i don't want ssi or disabilty check from
social security,just my regular social security.i seved
in us army from 1968 and got my honorable discharge in
1974.i'm 58 years old and am very sick i will more tan likly die before i'm 62 years old.i worked before i went
in the army and after.please there has to be some one
out there that can help me.
Albert J.Segura
Posted by: albert segura | Oct 30, 2008 4:47:19 PM
when reagan made changes in social security i was one
that was dropped from getting it.now i'm trying to get
social security they say i can't.i want my regular
social security.i don't want ssi or disabilty check from
social security,just my regular social security.i seved
in us army from 1968 and got my honorable discharge in
1974.i'm 58 years old and am very sick i will more tan likly die before i'm 62 years old.i worked before i went
in the army and after.please there has to be some one
out there that can help me.
Albert J.Segura
Posted by: albert segura | Oct 30, 2008 4:48:14 PM
I am sure that we all have been deceived over the last thirty years. Regan did not save Social Security he spent it, (with the help of Alan Greenspan), and that is why a lot of people who need the benefits can not get them. As it stands right now Social Security will fail somewhere between 2042 and 2052 depending on which study you use.
I highly recommend that everyone read or listen to Tom Hartman's book "Screwed", very informative.
Posted by: Doug | Oct 31, 2008 4:54:53 PM
