The History of Social Security
Despite the fact that the notion of social security dates back to the ancient agrarian societies in ancient times, the concept of social security, with its elaborate formal structures and government administration, is relatively young. This essay seeks to trace the history of social security, its effectiveness at inception compared to the present, and the future of Social Security.
Prior to the industrial revolution, the agrarian way of life dominated the American society. People worked in family farms and socioeconomic security was provided by the extended family. With the advent of the industrial revolution, people moved from farms to the cities, shifting from working on family farms to working for other people in industries for wages. As the 19th century drew to a close, an association was made between economic security in the industrialized world and social security, prompting the then German Chancellor of Germany Otto Von Bismarck to institute the first Social Security retirement program in 1889. It was only after the Great Depression that the US was spurred into action by the havoc wreaked on the economic life the country; in June 8, 1934, President Franklin D. Roosevelt announced to the Congress his intention to start a program for Social Security. The Social Security Act was signed into law in the year that followed on the 14th of August, 1935 (SSA, 2005).
During its signing into law, the Act had provisions for: Social Security Old-Age Insurance; Unemployment Insurance; Public Assistance programs for needy aged, and blind; and Aid to Families with Dependent Children. Various reforms have been incorporated into the Act over time to expand its coverage. Notable reforms include: 1937, Public Housing; 1939, Social Security Old-Age and Survivors Insurance; 1946, National School Lunch Program; 1950, Aid to the Permanently and Totally Disabled; 1956, Social Security Disability Insurance; 1960, Medical Assistance for the Aged;1964, Food Stamp Program; 1965, Medicare and Medicaid Programs; 1966, School Breakfast Program; 1969, Black Lung Benefits Program; 1972, Supplemental Security Income Program; 1974, Special Supplemental Food Program for Women, Infants, and Children; 1975, Earned Income Tax Credit; 1981, Low-Income Home Energy Assistance; and 1996, Temporary Assistance for Needy Families (SSA, 1997).
Social security expenditure has risen year after year since its inception. The total expenditure rose from $1,278,000 in 1937 to $493,212,000,000 in 2004. The coverage has increased from 53,236 beneficiaries in 1937 to 47,687,722 beneficiaries in 2004 (SSA, 2005). The programs have thus become more efficiently disbursed, with more and more people benefiting from the benefits that stand to be accrued from the fund. However, controversies have arisen, with claims that social security is a Ponzi scheme. Recent projections paint a gloomy picture: Social Security tax revenues are anticipated to fall below costs by 2017 and the Social Security Trust Funds are expected to be exhausted in the year 2041. However, the fund can be modified to account for the changes in the size of the taxpaying workforce and the beneficiaries' number. These modifications can take the shape of the government changing the benefit formulas or increasing taxes to keep the system from imminent failure (Zuckoff, 2009).
Social security was enacted into law in 1935. Since then, a lot of amendments have been made to the act to expand its coverage and the data on expenditure and beneficiaries attest to the increased effectiveness of the programs.
Background
Prior to the industrial revolution, the agrarian way of life dominated the American society. People worked in family farms and socioeconomic security was provided by the extended family. With the advent of the industrial revolution, people moved from farms to the cities, shifting from working on family farms to working for other people in industries for wages. As the 19th century drew to a close, an association was made between economic security in the industrialized world and social security, prompting the then German Chancellor of Germany Otto Von Bismarck to institute the first Social Security retirement program in 1889. It was only after the Great Depression that the US was spurred into action by the havoc wreaked on the economic life the country; in June 8, 1934, President Franklin D. Roosevelt announced to the Congress his intention to start a program for Social Security. The Social Security Act was signed into law in the year that followed on the 14th of August, 1935 (SSA, 2005).
Reforms of the Act
During its signing into law, the Act had provisions for: Social Security Old-Age Insurance; Unemployment Insurance; Public Assistance programs for needy aged, and blind; and Aid to Families with Dependent Children. Various reforms have been incorporated into the Act over time to expand its coverage. Notable reforms include: 1937, Public Housing; 1939, Social Security Old-Age and Survivors Insurance; 1946, National School Lunch Program; 1950, Aid to the Permanently and Totally Disabled; 1956, Social Security Disability Insurance; 1960, Medical Assistance for the Aged;1964, Food Stamp Program; 1965, Medicare and Medicaid Programs; 1966, School Breakfast Program; 1969, Black Lung Benefits Program; 1972, Supplemental Security Income Program; 1974, Special Supplemental Food Program for Women, Infants, and Children; 1975, Earned Income Tax Credit; 1981, Low-Income Home Energy Assistance; and 1996, Temporary Assistance for Needy Families (SSA, 1997).
The Impact of Social Security
Social security expenditure has risen year after year since its inception. The total expenditure rose from $1,278,000 in 1937 to $493,212,000,000 in 2004. The coverage has increased from 53,236 beneficiaries in 1937 to 47,687,722 beneficiaries in 2004 (SSA, 2005). The programs have thus become more efficiently disbursed, with more and more people benefiting from the benefits that stand to be accrued from the fund. However, controversies have arisen, with claims that social security is a Ponzi scheme. Recent projections paint a gloomy picture: Social Security tax revenues are anticipated to fall below costs by 2017 and the Social Security Trust Funds are expected to be exhausted in the year 2041. However, the fund can be modified to account for the changes in the size of the taxpaying workforce and the beneficiaries' number. These modifications can take the shape of the government changing the benefit formulas or increasing taxes to keep the system from imminent failure (Zuckoff, 2009).
Conclusion
Social security was enacted into law in 1935. Since then, a lot of amendments have been made to the act to expand its coverage and the data on expenditure and beneficiaries attest to the increased effectiveness of the programs.
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