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I wrote to Sam_Paine:

"Quit yer bitchin, the money doesn't come from your paycheck. The spread is nothing more than a reflection of the rate of inflation of the currency."

To which Sam Paine replied:

An Old Man that happens to be an Ignorant Man, I see. Look up "FICA" idiot. YES. It does come out of 'my' paycheck.

Sam, I did not mean to hurt your feelings, and I am sorry you were not able to understand what I wrote. You see, I was born way back in the middle of what you now call the Great Depression and have seen the progression of this social security thing since its inception.

Way back then people used to get paid by the day instead of the hour. A good wage was somewhere near $0.35 per day. That was a lot of money in those days especially for some people who were becoming used to making absolutely nothing. Believe it or not, working men were able to fed their families on that meager amount of currency.

Fast forward to today, A great many people I know are earning hourly wages that range from as low as $17 to the mid $40s. Most however are making about $35/hr which is about average. Back then, Dad and Grandpa worked 6 days a week for their money and frankly were pleased to get it. There were after all, a lot of people who were unemployed. You might note that the ratio of $35:hour::$0.35:day is quite astounding in that the people today on average make over 90.5 times more than Dad and Grandpa made when social security started.

I like to use the bread analogy when trying to compare the relative earnings of those who were lucky enough to have employment then with those working today. Back then, a loaf of white bread could be purchased for about a nickel ($0.05). Today I buy bread all the time for a price between $1.00 on the low end to as much as $3.50 on the high end. Averaging those two prices, you could say I spend on average about $2.25 Per loaf. The ratio of $0.05::$2.25 is about 45 which means that the price of bread has increased to about 45 times what it was during the great depression. Compare that with wages, which have gone up about 100 times.

Now I have to admit that Dad and Grandpa were not the brightest bulbs on the tree, but they tried. They had this idea that if they would provide something that everyone could use people would beat a path to their door. In pursuit of the goal of making something they could sell, both arose early (that would be about 3AM) and went to the bakery where they both engaged in the process of making dough for the bread. By 8AM they had somehow managed to make a small mountain of loaves to sell to the public. When it was almost all sold, grandpa took the remainder and gave it away to those who could not afford the nickel to purchase a loaf. then the process of washing and drying and moping floors and hauling ashes and a hundred other sundry tasks were finished both men locked the bakery doors and went home for supper at around 7PM.

Every night after supper, Grandpa would pour the contents of the small bag containing the day’s receipts on the kitchen table where he did the accounting. After subtracting the cost of salt, flower, yeast, water and fuel from the days receipts, he determined there would be at least 7 nickels left over to pay Dad's wages on pay day. The remainder was considered profit and Grandpa put those away in a safe place.

One day, A fella from the government came along and announced a "New Deal". He proclaimed loud and clear for all to hear that from now on nobody would be destitute in their old age. All would be entitled to receive a monthly stipend from the government from the time they reached 65 years of age right up until the moment of their death.

Grandpa went along with the program and increased Dads pay by enough to offset the amount he had to send to the government. Dad’s pay went from $0.35/day to $0.36/day but he was not required to make more bread than he did the day before. Grandpa who didn't have the advantage of an advanced education, decided that he would increase the price of each loaf of bread by $0.01 because he could not figure out how to divide a penny into several parts. The results of that move were somewhat mixed. A few people were so outraged at the increase that they never came back to the bakery again. Others bought less, while most continued to purchase in the same quantities as before. The result was that the bakery sold less bread at a higher price but the profits remained about the same. Dad continued to make as much as he did before the "New Deal" and everyone was happy.

Several years later we got involved a big war and sales boomed. The bakery was selected by the government to make those little round crackers that were put in the "C" rations. That was good for business for awhile but eventually the government ran out of money and decided to tax everyone to get the cash rolling into the government till again. The government also decided to give us another dish of "New Deal" and announced that more people were now eligible for the Social security benefits. The democrats seemed to think that was a great idea. They even figured out a way to make it a pay as you go system. To cover the expense of the newest members of the entitlement crowd, grandpa was asked to pay a new tax based upon how much he was already paying his workers (That was good old Dad). In reality Grandpa was really paying both parts of the FICA Tax. His solution was to charge the government more for those little round crackers and to increase the price of bread to everyone else. As before some people never came into the bakery again, the government got angry and canceled the contract for the little round crackers but the rest of the people reluctantly paid the increase in the price of bread and life went on.

After the war was over, Grandpa took his $35/month Social security check and retired. Dad was now the manager of the bakery and I was elected to get up early and start the fires in the ovens. Dad had a much better education than Grandpa having completed High School before all this "New Deal" stuff came along decided that the only way to increase profits was to expand the business. We put in an automatic bread slicer and a brand new Hobart dough mixer. The small mountain of loaves grew to epic proportions. We had to hire more help to move the bread to the trucks we had to buy to get the bread to the stores who could no longer come and get it because they were overworked filling orders for all the baby boomers who appeared shortly after the war. Whew! It makes a fella tired just thinking about all the work being done down at the old bakery. Just after the war was a great time to be in the bakery business except for two things. The government kept raising the taxes we paid on the income we were making and the people we employed were complaining that the wages we paid (Wager were now up to about $1.35/day) were not enough to pay for the goods they needed to have to provide for their familys. Dad sought the advice of Grandpa who responded with the same solution as before. The employees got a raise, the government got more taxes and the price of bread went up.

I forgot to mention some of the other benefits of the "New Deal". This is a good time to bring two of those to your attention. Due to the lack of faith in the banking system, the government came up with a great idea. The government would insure in the future all moneys stored in a bank. They even thought up a catchy title for the new department charged with administering the program. Today it is called "The Federal Deposit Insurance Corporation" You will find a little sticker on the front door of every bank that belongs to the system. Makes me feel real good to know that my money is safe again. How about you? A few years ago, we did have a few bank failures and sure enough the government covered all of the losses. The next thing that happened was that dad got a bill for more taxes. It seems that the government did not have enough money to pay the losses incurred when the banks failed.

By now we had the system figured out. Instead of waiting for our employees to ask for a raise, we invented a little thing called a cost of living raise which we give them every year regardless of whether they improve their productivity or not. The government came up with a nifty idea to pacify all the workers about the security of their retirement funds and now make us separate their wages into various categories. The item you see on your pay check titled FICA is just another sticker on the window. We also send more money to the government and raise the price of bread.

Over the years we have made great strides in improving the productivity of the bakery. What started as a few hundred loaves/day has grown into the tens of thousands of loaves/day. We now employ lots of people to produce bread and to assist in getting it to the stores that sell it to you. Over the years, we have raised the price of bread to a level we would never considered possible back in the early days. We still use the same amount of ingredients in each loaf however.

At no time during the history of the bakery has any one of our employees paid a single penny into social security. The money we sent to the government came from the sale of bread. Our little company simply acted as middle man collecting taxes from the purchasers and sending it to the government.

Every company that I know of does business exactly as I have described above, If you have a better way, I would be happy to sell the bakery to you.

An Old Man