Word: social
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Dates: during 1930-1939
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These figures however do not show the real cost of running the Government on a post-Recovery basis because they include large Relief expenditures. Eliminating Relief costs, charging the Government with only the net cost of Social Security (see below) and allowing for no debt retirement, the expenses of the Government for fiscal 1938 come to about...
...revenue, however, $775,000,000 will be raised by Social Security taxes. Subtracting this sum the Government's net income for the post-Recovery era will be $6,519,000,000 compared to a typical $4,000,000,000 in pre-Depression times. This increase of 62% is not due to customs collections which remain below pre-Depression levels. As Depression brought new functions of government it also brought new taxes. Biggest of them are liquor taxes, $644,000,000; manufacturers' excises $449,000,000; miscellaneous nuisance taxes, $83,000,000. But the biggest increase expected...
...Social Security. Franklin Roosevelt's 1938 budget added Social Security taxes to the Government's revenues, added to its costs not only anticipated Social Security payments but also a reserve of $540.000,000 for future old age pensions...
...Social Security Plan is virtually a separate business, like the Post Office. In the budget the revenues of the Post Office do not appear, and of its expenditures only $30,000,000, its net deficit. On the same basis Social Security taxes are not really Government revenues, and the only real Social Security expense is the system's net deficit, $61,174,000 for 1938. However there is one big difference between selling annuities and letter-carrying: Social Security payments will be far smaller than its tax collections for many years. In 1938 collections will exceed actual payments...
...Congress, President Roosevelt intimated that he thought it would be foolish to build up such a huge reserve. For the time being he would be content to let the reserve pile up, but after it has got a start, adopt a "pay-as-you-go" policy, presumably reducing Social Security taxes so as to collect no more than was paid out in pensions...