Legacy debt

Legacy debt

The "legacy debt" in the United States Social Security System is the difference between what the first generation of beneficiaries paid into the system to the benefits that they received. [Referenced in: Diamond, P. A. and P. R. Orszag (2005). "Saving Social Security." Journal of Economic Perspectives 19(2): 11-32., although this term was likely used earlier.] The very first beneficiary was Ida May Fuller who paid only $24.75 towards Social Security and upon her death at age 100 she had collected almost $23,000 in benefits. [DeWitt, L. (1996). "Details of Ida May Fuller's Payroll Tax Contribution." Retrieved April 16, 2007, 2007, from http://ssa.gov/history/idapayroll.html.]

Paying off this legacy debt is a goal for Social Security reform so as not to burden future generations.Fact|date=July 2007

It is also a contributing reason as to why the Social Security Trust Fund has such a low annual rate of return.Fact|date=July 2007

References


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