90 years of Social Security

Every once in a while, I like to peruse Redfin and other realty sites and look over house listings.  As they say, the three most important things in real estate are location, location, and location.  It continues to amaze me how a modest mid-century modern three-bedroom, two-bathroom home in Palm Springs will sell for over a million dollars.  Despite the increase in local property values over the past five years, one still gets far more for one’s money in northeast Ohio. 

Lately I’ve been looking at homes in Shaker Heights.  There is a section in southeast Shaker with some very attractive two-family homes – although they appear to be single family homes to the casual observer.  Many of these homes have a larger upstairs unit on the second and third floors, and a smaller unit on the first floor.  Closer to the center of Shaker, there are numerous homes with the following layout: social spaces (living and/or family room, sunroom, dining room, and kitchen) on the first floor; bedrooms with two full bathrooms on the second floor; and small bedrooms with a small bathroom (often with a tub but no shower) on the top floor.  I find this layout interesting as the top floor would be ideal for flex space: workout room, office, or guest bedroom.  Nearly all of these houses were built prior to 1930.

What’s the story behind these houses?  Simply, the top floor was meant for servants – usually one cook and one housekeeper.  Before the Great Depression there was a surplus of people who worked as servants.  Most were single younger females or widows and, in the era before the minimum wage was established, they worked for a pittance with no benefits aside from room and board.  Often the servants’ quarters were accessible only through a separate staircase.

My maternal grandfather came of age in a family which had servants under this setup.  He died long before I was born, but I remember visiting his sister’s home in Columbus.  Even as a small child I was impressed with the place, especially the door from the kitchen to the dining room that opened both ways and, yes, they had a servant.

With the growth of the middle-class that accompanied the post-war economy, the live-in servant paradigm came to an end.  In particular, older people were not obligated to work until they died thanks to the Social Security Act, which was signed into law 90 years ago today.

Politicians of both parties, but especially Republicans, have been tampering with Social Security for the last few decades, to the programs detriment.  Early in his second term, President George W. Bush tried to move the Social Security Trust fund toward private investments, which was met with widespread disapproval and began to fracture his political coalition – a fracturing which accelerated after his administration’s inept response to Hurricane Katrina.  Others within the right-wing have tried to mislead people into believing that Social Security is a Ponzi scheme.

This need only be stated for those who don’t understand how Ponzi schemes work: Social Security is not a Ponzi scheme; it is an insurance program which has worked extraordinarily well for 90 years.  As with any insurance program, not every payer of premium receives a benefit, e.g., some die before they reach retirement age.

Today, Social Security is in profound danger of collapsing.  A few simple fixes would make the Social Security trust fund solvent into the 22^nd Century: First, raise the cap on taxable income.  Second, gradually, over time, raise the retirement age by six-month increments every five years commencing in ten years.

Democrats seem unwilling to fight for this multi-generational contract which has saved literally tens of millions of senior citizens from poverty ridden old age.  MAGA Republicans seem desirous of ending the program – even though it is revenue neutral. Part of this worsened by their clamping down of immigration, since migrant workers pay into Social Security but will not draw benefits unless they become citizens. As Harry Truman once said, “The only thing new in the world is the history you don't know."  Truman, an economic populist who tried to institute national health insurance, would be appalled not only by Republican actions, but by the lack of Democratic fire over the issue.  Even Republicans like Dwight Eisenhower and Richard Nixon, who believed in Keynesian economics, would be shocked at the direction their party has taken.

The economic goal of today’s MAGA Republicans is not merely to destroy the social safety net which has helped prevent another Great Depression, they want to take us back to the age of the Robber Barrons and possibly instill a neo-feudalistic economic system.

Unless the average citizen fights back, that’s exactly what they are going to do.