If you survive to a hundred and five

Philadelphia just had its annual celebration of centenarians, of which there are 500 who call our fair city home. Mayor Michael Nutter was on hand to fete the lives of people who managed to “survive to a hundred and five,” or thereabouts, as the 1953 pop song “Young at Heart” says.

Seeing 10 decades is a blessing, but a funny thing happened to the national economy as a result of the busting of the actuarial tables. A new “insurance” program called the Social Security Act was signed into law in 1935 by President Franklin D. Roosevelt “to give some measure of protection to the average citizen and to his family against … poverty-ridden old age.” Because the idea of government handouts or welfare still carried a stigma in those days, the program was touted as an earned right, and was made universal. Moreover, the portion of people’s paychecks that was taken by the feds was not called a tax but a “contribution.” The explanation was that Uncle Sam was carefully laying aside your own money for you, to give back to you in your dotage.

The problem is that this was not precisely true. The money paid into Social Security by John Q. Public is not actually held in a fund for him, but is used to help other people and causes, as the government sees fit.

According to the Social Security website, a Vermont native named Ida May Fuller was the first person to receive regular Social Security benefits. A legal secretary who retired in 1939, Fuller had worked for three years under the new “New Deal” program. She had paid into it a grand total of $24.75, and her first monthly check was for $22.54.

The problem is that Ms. Fuller retired at age 65 and lived to be 100 years old, and over the course of the 35 years that she lived beyond the 65 years life expectancy of the time, she collected $22,888.92 in Social Security benefits, in other words, 92,000 percent more than she had contributed. FDR’s original selling of Social Security as “insurance” morphed into a system of income redistribution in which the untimely dying would support the octo- and nonagenarians and those who survived to a hundred and five.

Too bad that FDR did not think of indexing the age of retirement to the increasing life expectancy. Then the 21st century edition of the social program would not be left in the unsustainable position of paying out more than it takes in in payroll taxes. As it is, the trust fund is exhausted, the money you entrusted to Uncle Sam is spent, and the coffers are filled with a bunch of dubious IOU’s.