Security was attained in the earlier days through the interdependence
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Security was attained in the earlier days through the interdependence of members of families upon each other and the families within a small community upon each other. The complexities of great communities and of organized industry make less real these simple means of security. Therefore, we are compelled to employ the active interest of the Nation as a whole through government in order to encourage a greater security for each individual who composes it…This seeking for a greater measure of welfare and happiness does not indicate a change in values. It is rather a return to values lost in the course of our economic development and expansion…
- Franklin D. Roosevelt (History6.html)
Social Security survived in the past because it is addressing a universal human need of financial security. Every person has to face the uncertainties that life can bring, be it death, disability or old age. Before the 20th century more then half of the people living in the United States lived and worked on farms (History6.html). Their economic security was provided by their extended families. When the country got to the point where more people lived in urban areas rather then rural areas, the extend family and family farms as a source of economic security dwindled. The Great Depression was the event that exposed the weakness in the country’s economic structure. Social Security, from that time to the present, has been the program that has kept many retired persons out of poverty. The challenge facing us now is to keep Social Security in tact for the 21st century.
Over a period of three months beginning in late 1929 the stock market had collapsed, losing $26 billion; 40% of its value. Unemployment surpassed 25%, the Gross National Product declined from $105 billion during the “Roaring Twenties”, to $55 billion and wages paid to workers declined from $50 billion in 1929 to $30 billion in 1932. For those above the age of 60, poverty levels also reached an all time high (Early.html).
To solve this problem many ideas were entertained by the nation. One idea came from the governor of Louisiana, Huey Long. Huey Long was technically described as a democrat, but he was considered a radical populist. Mr. Long wanted the government to collect the wealth of the nation’s privileged, and then disperse it evenly among the rest of the nation. He also suggested actions such as limiting private fortunes and yearly earnings. Another idea, proposed by 66-year-old, unemployed doctor, Francis Townsend, called for the national government to give every retired person (age 60 or older) $200 a month. He planned to support this pension by an annual 2% sales tax (Early.html).
No action would be taken to provide some sort of social insurance for the elderly until Franklin D. Roosevelt took the office of the President of the United States. Roosevelt announced his intention to design a program for social insurance in June of 1934. By January of 1935 Roosevelt had a plan for Social Security. His plan, similar to that being used by at least 34 different countries in Europe, was a “work-related, contributory, system in which workers would provide for there own future economic security through taxes paid while employed.” (History6.html)
President Roosevelt later signed the Social Security Act into law on August 14, 1935. The Act provided, a social insurance program “designed to pay retired workers age 65 or older a continuing income after retirement.” (History6.html) Franklin Roosevelt said, “We can never insure one hundred percent of the population against one hundred percent of the hazards and vicissitudes of life, but we have tried to frame a law which will give some measure of protection to the average citizen and to his family against the loss of a job and against poverty-ridden old age.” (History6.html)
From when the first Social Security payments were made, in 1942, to now, Social Security has provided a “…minimum ‘foundation of protection’ for retired workers…” (10055.htm). 148 million workers are protected by Social Security, with 44 million people receiving some sort of benefits today. Social Security has become an irreplaceable part of most of today’s retired Americans. More then 90% of “older” (retired) Americans receive Social Security benefits each month. Consequently, only 11% of American senior citizens live in poverty. If there were no Social Security benefits guaranteed to
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Personal finance, Social Security, Independent agencies of the United States government, Social programs, Welfare economics, Federal Insurance Contributions Act tax, Pension, Retirement, Economic security, Welfare, Social Security debate in the United States, Railroad Retirement Board
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