The times-news. [volume] (Hendersonville, N.C.) 1927-current, 1937-06-28
SOME LIGHT ON SOCIAL SECURITY


So-called social security taxation consti-
tutes the most gigantic burden, in the form
of taxation, ever imposed on the workers
and business and industry of this or any
other country. The program is a perilous
experiment in socialism and is so directly
and fundamentally linked with the future
social, economic and political course of the
country that the time has fully come when
all citizens of the United States should be
earnestly engaged in seeking to under
stand this program and, in so far as posi-
ble begin to forecast its results and effects
on the future of the nation.
Note that the whole burden of this gil
gantic experiment falls on the workers of
this country and their employers - and
only on certain classes of workers and en-
ployers-as there are classes of both work
ers and employers exempted from taxation
and classes of workers excluded from re-
ceipt of benefits. This fact should not be
lost in the shuttle in considering this
scheme.
The Times-News has been helped to a
clearer understanding of the intricate in
side possibilities of this taxing scheme by
study of discussion of the subject by The
Guaranty Survey of New York, from which
the following extracts are made:
1.-THE main detectives of the Social Security Act
are unquestionaby praSeworthy and must COM
mand universal sympathy. But the act itself should
be recognized for what it ia gigantic expert
ment, or set of experiments, with some papable
weaknesses that need correction and with numer-
Gus other features that must be tested by expert
ence to be proved workable. Certainly the old age
reserve account benefit plans should be adjusted
toward 'pay-as-you-go' basis, with definite re-
quirement that taxes collected in advance of bene-
fit payments be used to reduce the public debt and
not to finance extravagant schemes of expenditure
Serious consideration should be given to the posi-
bility of financing benefit payments with taxes less
likely to be destructive to business enterprise than
those on payrols. Finally the operation of the en-
tire program should be closely watched in an eff
fort to determine whether the national economy is
capable of bearing financial burden of such vast
magnitude without suffering ill effects so serious
as to outweigh the advantages.
"These considerations point, finally, to the one
absolute prerequisite for the of this or any
other public benefit plan-the reestablshment of
the national finances sound basis.
at is this 'self-supporting' basis of the old age
benefit plan, whereby vast fund of government
obligations is to be built up reserve against
future demands, that is the most unsound feature
of the entire act. A moments consideration Is
sufficient to show why this is Receipts from
the payroll taxes to be paid into the treasury
rs internal collections and become part of
the general income of the government. They are
not set aside by law for the old age reserve &C
count although there seems to be popular belief
that they The final determination of the
amount to be appropriated to the account each
year rests with Congress.
Funds credited to the account, however, are not
to be held in cash. They are to be invested in di-
rect and contingent obligations of the government,
either on original issue at par or by purchase of
outstanding obligations in the open market. In
case special obligations issued to the account,
the amounts paid for those obligations go back into
the general fund of the treasury. In other words,
the treasury simply keeps the cash and issues its
obligations to the account. Therefore, if the
receipts from the payroll taxes were 'earmarked'
for the account the treasury would still be free to
use the cash for its current expenditures
''When the plan is viewed in this light, it be-
comes obvious that the idea of the old age reserve
account as an accumulated fund constituting re-
serve against future needs is delusion. The ac-
count is merely bookkeeping device, set Of fig
ures without tangible meaning or value. The obi
cations held in the account, ostensibly reserve
are nothing more than the unsecured promises OF
the government to pay; and the government might
equally well undertake directly to pay future ole
age benefits without any reserve account whatever
''The criticisms that have been made against the
reserve account are due to the fact that it is moi
only unnecessary but presents constant tempta
ton to governmental extravaganza temptation
that will inevitably be strengthened by agitation
from the newly created pressure group OF pros
pectiye benefciaries. The spectacle of asfund .