Social Security's original winners and losers and the root of the present problem: An historical generational accounting investigation of the 1935 OAI and 1939 OASI programs.

摘要

Since its inception in 1935 the Social Security program has become one of the largest single endeavors in the world. Recently a general consensus has emerged that the program is in financial trouble. To better understand the current situation it is my belief that the program should be viewed in its historical context. To do so a fundamental reassessment is in order of the fundamental economic nature of the program when it was established. It is my view that we must, as part of this process, investigate the very foundations of the system—the 1935 OAI and 1939 OASI programs. That is the purpose of this dissertation.; The techniques used must take into account that these are, by their nature, forward looking programs. In this work, using the Generational Accounting techniques of Auerbach, Gokhale, and Kotlikoff, I investigate and quantify the economic nature the first two OAI programs by constructing a set of related Generational Accounts for both.; From my results we can see the very root of our current problem. The system started by making an aggregate transfer to future generations of {dollar}1.2 billion. More than enough was taken from the young of 1935 to support transfers to their children as well as to their parents and grandparents. However, there was a transfer of {dollar}5.4 billion, in the aggregate, to those of voting age in 1936. In addition, the impact differed considerably by gender, with males faring better than females in some situations and worse in others.; The amendments of 1939 mostly reinforced the 1935 results. Many cohorts received transfers again, and all male cohorts were recipients. Overall there was an aggregate transfer to those then alive of {dollar}6.0 billion. This rose to {dollar}6.5 billion among those of voting age in 1940. In contrast to 1935, all female cohorts fared noticeably worse than the corresponding male cohorts. However, the generational stance of the program after the amendments was such that future cohorts were still slated to receive a transfer from the existing cohorts of 1939. Social Security's burdening of future generations had to have come later.