In the 1930s, the effects of the Great Depression were still being felt in America. President Roosevelt favored using the federal government to address unemployment, poverty, and other social ills of the time. The Social Security program was, in fact, a 1930s solution to a 1930s situation. Initially financed by a mere 2-percent tax on the first $3,000 of a worker’s income, 200,000 retirees were paid an average $58 a year by the government-run program in its first three years.
By current standards, FDR’s approach was modest. Over the years, though, as the number of retirees grew in both size and political clout, politicians in Washington began to manipulate and expand the program to gain favor among the important senior citizen voting bloc. More people became eligible for the program payments, and payments were increased year after year.
Now financed by a 12.4 percent tax on incomes up to $68,400, 44 million people are paid an average of $8,300 a year by the Social Security Program. Eight out of 10 workers now pay more in Social security taxes than they do in income taxes.