Are Social Security Benefits a Form of Socialism?

Socialism cannot have one mode of definition, for the way society exists is dynamic and diverse. Socialism, developed as a concept by theorists is coloured by a variety of applications influenced by factors that are unique and common to specific societal workings. The United States’ Social Security Benefits program, in that way, underlies an impressive ideological functioning of the United States in its effort to cater to one section of people. The whole system has been effectively structured beginning at grassroots levels that determine how a certain lifestyle is achieved through not only having a base social model of functioning but also through familial relationships. 

Is Social Security Socialism

At the forefront, while Social Security Benefits program seems to be designed for individuals to ensure fair living, the whole system encourages a mode of life that promotes a fine balance between dependence and independent living. However, misuse of benefits does more harm than good, and although regulations in place have restrained misuse to some extent, the wider picture still needs to be looked at. Factors that affect families as a collective unit, largely affecting society as a whole, need to be taken into consideration. 

To begin with, there needs to be a better understanding of what socialism is and what its tenets state.

Understanding Socialism

A simple definition of the term ‘Socialism’ is The collective ownership and control of the population over the means of production and the distribution of the products (end results) equally among the population by the government.

People supporting Socialism would claim that this form of society is more compassionate. 

A fully socialist country would promise equality between the powerful and the powerless and would aim to spend the wealth of the country on the welfare of its citizens.

Socialist countries in the 21st century

The five Nordic countries, Norway, Finland, Sweden, Denmark, and Iceland are the best example of socialist countries in this day and age. The governments of these countries are in control of a major part of the economy and a large portion of it is spent on public welfare, education, and housing.

But these are not 100% socialist countries. The incorporation of aspects of a capitalist economy in these countries, combined with the socialist aspects, makes them few of the happiest countries in the world.

The implementations of socialism in a country may define its meaning for it. For example, socialism was a major part of the Nazi Party and is the same for the unmatched, world-class education system of Finland.

But how does social security contribute to socialism? For that, let’s understand the working of the system.

The Social Security Program

In short, social security is a government program that financially helps citizens who are retired, unemployed, or disabled by providing them with appropriate benefits.

The Social Security Law was brought into existence by President Franklin Roosevelt on August 14, 1935.

Social insurance, as conceived by President Roosevelt, would address the permanent problem of economic security for the elderly by creating a work-related, contributory system in which workers would provide for their own future economic security through taxes paid while employed.

It was made into a law to solve the problem of economic security for senior citizens of the United States of America. Through this program, the citizens would pay a percentage of their income as taxes in their young, working years, and when they retire, they can benefit from the same tax money.

Every United States citizen is given a unique 9-digit number called the Social Security Number. This number is very important for getting jobs and for filling out taxes with the IRS. It is advised to be kept to oneself since it has most of one’s information and if stolen, can result in identity theft.

Paying hundreds of billion dollars a year, the United States’ Social Security is one of the biggest government programs in the world.

What are Social Security Benefits?

There are a number of benefits provided by the Social Security Benefits Program. The most important benefits are:

  • Retirement Income
  • Disability income
  • Death and survivor benefits
  • Medicare: health insurance for those over 65 years or disability

Employer and employee pay social security taxes. 6.2%, matched by the employer

During the working years of a United States citizen, they pay social security taxes which are equal to 6.2% of their income (originally 1% in 1935) and the same amount is matched by the employer. This amount, which is a total of 12.4% of the person’s income, goes towards a huge social security fund.

The social security income amount is based on the amount the person paid as taxes. The minimum and maximum amounts do not have a huge gap between them. This means, a person who paid a huge amount as Social Security taxes, may not get the same amount as Social Security income. 

A United States citizen can end up with more money in their retirement years if they save 12.4% of their income with themselves and not pay it as a tax to the government.

The who, when, and how of social security benefits

With Social Security, the government decides the amount and sets the timeline for payment. People get to decide when to start receiving benefits, starting from the age of 62 up to 70. Claiming benefits is dependent on factors such as lifetime earnings, age of claiming benefits, and such. However, the system is effective, in that, it caters to a decent cost of living depending on the economic stability of the country.

The amount is fixed on a monthly basis, and no adjustments can be made in terms of either withdrawing more or less as per requirements.
For people terminally ill at younger than the retirement age, retirement benefits cannot be claimed early on, but a Social Security Disability Insurance may work. What other private-sector brokerage firms offer is the ability to cash out retirement benefits at any point, so in a way, your savings are entirely yours when you deem them to be. There may be a penalty in some cases but no requisite as such for proof of disability to work.

Conclusion

Answering the grand question here, yes, United States Social Security Benefits, in fact, are a form of Socialism. Understanding the whole system, we see that the government decides how much the citizens have to pay (6.2%) and when they have to pay it. It’s the government itself who decides when the citizens can get their benefits and how much of it, they will be receiving.

The whole system gives the program a sense of the ‘greater good of society’, even though it has several flaws.

It does not matter how much you paid as taxes for social security benefits in your younger years, you will not be getting almost the same amount back.

The money collected by the current taxpayers gets distributed among the citizens who benefit from this program. Clearly, it is, at least, seeing as the program aims for the greater and equal good of the society, even though it is just a part of the society that is benefitting from it.

But of course, it is just not possible for a country or a part of a society to be 100% socialist (or communist, capitalist, or even fascist) in 2020. Owing to the broken US prison system, social security benefits are not awarded to prisoners. A person incarcerated for more than 30 days after being convicted of a crime loses their eligibility to collect their social security benefits. These benefits can only continue after the person is released.

Medicare Part B (health insurance), which is a part of the Social Security Benefits, terminates if the monthly premiums are not paid on time. Many prisoners cannot afford to pay for the premiums, the reason being, again, the broken prison system.

So, looking at the definition of ‘socialism’, the major part of the United States Social Security Benefits program is a form of socialism. Its advantages and flaws, both, more or less, match with the pros and cons of a socialist society. 

Eliminating the flaws in this program will lead it to be more efficient, equal, and fair for the citizens, which will only make the program more socialist.

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