The ultimate success of a social security system will depend to a large degree upon cost. As has previously been discussed at length, a social security system is in the main a defensive program which occupies a subordinate position in maintaining and developing the productivity of the nation, upon which rests true social security. If excessive cost should reduce productivity and lessen employment, the system will do more harm than good. As the cost of a system increases, moreover, the danger becomes greater that the costs will have to be met through inflationary processes that tend to prevent the system from attaining the desired objectives. The question of costs is not, therefore, one to be left to a blind faith in the future. The interests of true social security are not served by the individual who suggests to the American people that when the danger of excessive costs is mentioned they should ostrich-like bury their heads.Social security systems may be developed in either of two ways or through a combination of them.
1. The more common way, as exemplified in the American old-age and survivors insurance system, is at the outset to include only those employees in the active service, and to pay benefits only as those covered employees gradually, class by class, reach the retirement age. Under this system, costs will increase annually until the system reaches maturity or full load, which will be sometime after the year 2000.
2. The less common way, to a considerable degree exemplified by the New Zealand system, is to begin at once to pay benefits to all members of the population who qualify for them. A system entirely designed upon this principle would start under approximately full load. The cost today would not be radically different from the cost in 2000 except for the gradual changes which may take place in the composition of the population and adjustments that have to be made because of price changes and other economic factors.


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Relief and Social Security
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