OBLIGATIONS FOR THE FUTURE
A social security system based on principles of insurance by its very nature projects itself forward over an indefinite future. As indicated in a preceding chapter, it will be 80 years before the schedule of disbursements under the present American old- age insurance system reaches its maximum. It was estimated that by the year 2000 total annual disbursements for a comprehensive no-means test system covering the entire population would range from 10 to 20 billion dollars.
The present O.A.S.I. system does not provide for the accumulation of any real, tangible, income-producing reserves. Nor is it practicable in any comprehensive government system to accumulate the reserves from which ultimate payments might be made. Accordingly, a universal insurance system inevitably establishes a schedule of obligations covering a long period of years without accumulating investments out of which the obligations can be met. In a sense security is being bought on credit, with the problem of paying for it deferred to the future.
Neither the government nor the public has squarely faced the implications involved in this piling up of obligations for the distant future. The establishment of bookkeeping reserves has created an illusion that something tangible is being accumulated, whereas in fact current receipts are being used for current expenses of government. Disbursements made in the future will thus have to be met out of revenues raised in the future. The nation's ability to meet the social security load over the years will depend upon the financial capacity of the government in ensuing decades. Financial capacity in turn will depend chiefly upon (1) the growth of productive capacity and national income; and (2) competing claims for such income.
It is impossible for anyone to forecast with accuracy whether obligations of the magnitude involved in the social security sys