In 1929, the New York stock market crashed. With the crash, literally thousands of people lost their entire life savings. Banks collapsed, businesses closed, and the country sank into the Great Depression. President Hoover did so little to remedy the situation that the small cardboard shacks that sprung up in parks around the major cities were called “Hoover-villes.” By the time Franklin Delano Roosevelt ran for president, the country was ready for a change. Part of his platform for his presidency was the New Deal, which led to social security, among other saving graces.The United States Social Security system, which is the common name for the Federal Old-Age, Survivors, and Disability Insurance (OASDI) program, is the largest social insurance program in the world.
The Social Security Act, also known as the Old Age Pension Act, was signed into law on August 14, 1935, by President Roosevelt. It provided benefits for the retired and unemployed by taxing those who were currently employed through a payroll tax. The premise of the Social Security system was the same 72 years ago as it is today, to provide financial security and stability to the common working man (http://en.
wikipedia.org/wiki/Social_Security_Act).Although today we take it for granted, the signing of the Social Security Act in 1935 marked a major milestone in America by turning the tides of the Great Depression. It protected the money of the working people, and it ensured that peoples’ life savings would not be lost in a bank collapse. It also provided for security in retirement by giving a regular, fixed income to all of the people who had served and worked faithfully in the country for generations.
It was the idea as much as it was the actual promise: the country would take care of its citizens, because its citizens had provided so much service for it during their young lives.President Roosevelt believed so strongly in the Social Security system that he was willing to change laws for it. When he tried to get it signed into law and the bill was struck down by Congress, he retaliated by helping to pass a bill that allowed the President to appoint new federal Justices if the current Justices were older than 70. By doing so, he was able to appoint 6 new Justices and effectively rig the vote in his favor.
While Congress and the Supreme Court were not at all thrilled with his decision, Roosevelt used his advantage to ultimately pass the bill. Although there was a debate surrounding the merits of the system, this Justice stacking ensured that the bill would be sustained in May of 1937 (http://en.wikipedia.org/wiki/Social_Security_Act).Although some likely felt this was merely a power move on Roosevelt’s part and that it was unwarranted, Roosevelt’s guts allowed him to pass a bill that became a critical part of this country’s current legislature and civic support system. Had he not been so adamant, the country may not be in the shape it is in today.
The country was at a critical juncture when Roosevelt became president, and he was willing to lead with an iron fist if that was what it would take to get the country back on its feet. Roosevelt, indeed, went on to become one of the most popular presidents ever, being elected four times and dying shortly into his fourth term, when Harry Truman took over the presidency.The original idea behind the system was to provide a sense of security for the common working man. In the case of disability, retirement, or the death of the breadwinner in the family, the Social Security system would provide financial help to that person’s surviving family, by taxing the working population. Starting in 1937, a 2% payroll tax was imposed on all workers in the United States.
1% of this fell to the workers themselves and a second 1% was paid by the employers. This payroll tax was dispersed to nearly 54,000 beneficiaries, mainly as lump sum death benefits (today, this is not true. Much of social security is paid out to those who are living but are retired as a fixed income). This tax was increased to 3% in 1950, 4% in 1956, and then again to 6% in 1961, the rate at which it stands today (http://en.wikipedia.org/wiki/Social_Security_Act).
Since its inception, Social Security has allowed Americans to feel sure that another tragedy like the Great Depression will never occur. It provides for security even in tragedies by guaranteeing that the government will pay if anything occurs. It keeps the value of money roughly the same, too, so that should a crash occur, the dollar would not lose its value, effectively rendering any money saved worthless. Without this program, the country would have floundered and had trouble emerging from the Great Depression (http://en.wikipedia.org/wiki/Social_Security_Act).
Some elderly people, to this day, do not trust the government, and they hide cash around their houses in case the banks were to collapse. This is a worry that stems from the Great Depression, when money that was saved in banks was simply gone. The social security act has put in place sanctions that would prevent banks from losing money. The government now guarantees savings up to several thousand dollars.To further protect peoples’ money and their security, Medicare was added to the benefits in the Social Security Act of 1965. This ensured that doctors’ bills would be paid for those 65 and older.
It also provided for prescription coverage and other medical expenses. The program was a big success and had 20 million people enroll in only the first three years. Today, Medicare provides for millions of elderly Americans’ medical expenses (www.ourdocuments.gov).
The debate about Medicare actually started during Harry Truman’s time. He was Roosevelt’s immediate successor, and believed strongly in Roosevelt’s plans for the country. He brought up a system of public healthcare and ways to fund it, but the country was terrified of “socialized healthcare,” similar to what is found in other countries, and rejected the idea.Ultimately, the bill was passed during Lyndon Johnson’s presidency, when the country was perhaps more ready for the ideas that Medicare presented.
Though it was resisted, it has proved to be a necessary part of the bill itself. It is especially important because of rising health care costs and the sometimes astronomical needs of older people, which only grow as more diseases, like cancer, Alzheimer’s, and other illnesses, are discovered. These disorders sometimes require lengthy stays in nursing homes or hospice, and cannot be afforded easily by families, even with traditional medical insurance. Medicare ensures that these elderly will be well-taken care of, and that they will have access to diabetic supplies and other prescription medication to manage or treat their conditions.Social Security, including Medicare, makes it possible for retired persons in this country to enjoy benefits throughout their lives without worrying that they will not have enough money to pay their increasing expenses, namely medical costs. It has provided immense security for people for decades.
In recent times, social security has faced some trouble as the workforce has aged. Government officials estimate that within twenty years, as the so-called “Baby Boomers” retire, and since people are now living longer, healthier lives, there will be more people who are retired than those who remain in the workforce. This will present a burden on working employees and employers, who will still be expected to pay for the social security checks of those retired individuals.For this reason, social security reform has been a hot topic for several years now. The government has looked at several new systems, including privatized accounts, that would change the system around and be able to continually provide benefits for all Americans.
While many of these reforms have been fought by the average citizen as well as Congress, something will eventually have to be done about the system. Social security is something that all Americans have come to rely on. It is their safety net.
Some have saved little or nothing for retirement, because they are expecting to get appropriate and adequate social security benefits. However, the current advice is not to rely on the system, because while it is a crucial part of our social benefits, it is by no means a flawless system, especially with so many retired persons in the country.Despite its flaws, if this system had not been created, the country would not have the security that it does today.
People rest easy knowing that if something unthinkable happens, the government will step in and provide them with money when they really need it. Today, if a breadwinner dies, or children’s parents die, the families are afforded money to help with their living expenses. This is an especially important part of the bill, one that gives families help they need when they might otherwise find themselves overwhelmed by a tragedy.Social security is a necessary and important part of this country. It provided a fight when the country needed one, and pulled the country out of its biggest economic slump ever.
It now provides for daily living and medical expenses for nearly all elderly people in this country, giving them a true security in life. Without this program, the country may have floundered and never recovered from the Great Depression. With it, the country is currently a great world power.The social security system is the biggest of its kind in the world even today. It is part of what makes this country so great. It is a part of what the “American Dream” is for immigrants who come here for a fresh start and to finally be taken care of.
Social security has made that care possible, and hopefully, despite its current problems, it will continue to care for generations to come.