Thursday, 12 August 2010

Social Welfare started in USA

This is a very interesting article on Social Welfare. Go to the link
below to read more comments on Social Welfare in USA.

Social Welfare may be socialism but it is certainly not communist. The
communists do not have social welfare and social welfare is not free.
You have to pay for it.

It is interesting to note that Malaysian NEM mentions the importance
of social safety net in order to encourage entrepreneurs to take more
risks. Taking risks is an important part of innovation. You must try
new things before you can innovate, and we can never tell if a new
thing will be successful or not, for certain. You just have to try
them out despite all the risks.

This story is taken from Sacbee / Living Here / Seniors

Social Security nears 75th anniversary
Published Monday, Aug. 09, 2010

Evelyn Sekula's widowed grandmother struggled to survive during the
Depression. Like millions of other elderly people, she had no pension
and no savings.

"She had no income at all except for what my father gave her," said
Sekula, 90, who lives at the Atria El Camino Gardens senior residence
in Carmichael. "She was always looking for a way to make money. My
father probably gave her $10 a month."

Today's older adults were children and teenagers when President
Franklin D. Roosevelt changed the face of aging on Aug. 14, 1935, when
he signed the Social Security Act into law.

They remember the difficult years when old age took place in a bleak,
Dickensian landscape of need dotted with poor houses for those whose
families couldn't support them. And they remember the difference that
Social Security made in ordinary people's lives.

They also remember their parents' fears that Social Security amounted
to socialism. Yet on the edge of the program's 75th anniversary, most
of them can't imagine retirement without the small cushion of funds
and dignity that Social Security provides.

As California Budget Project executive director Jean Ross says, Social
Security lifted the elderly out of poverty – and as the most important
source of income for most older Americans, it continues to do so.

But the recession has had a negative impact on Social Security,
according to a trustees' report released Thursday: Reduced payroll
taxes have resulted in Social Security's first projected annual
deficit since 1983. Despite that, both the trustees and the
Congressional Budget Office say that the program will remain solvent
until 2037.

The huge demographic bubble of baby boomer retirees will take a toll
on Social Security, as well. While there currently are 3.2 workers for
each recipient, that number will drop to 2.1 by 2034, according to the
Social Security Administration.

The 2010 trustees' report suggests that gradual increases in
employment numbers, along with a new health insurance tax later this
decade, will improve the program's financial picture.

Research consistently shows deep public support for Social Security,
not only among the elderly but also among younger generations.

But without significant change – either through privatization into
investment accounts, as some advocates say; or by raising the minimum
age for full benefits and lifting the payroll tax cap on income above
$106,800, as others suggest – the public remains plagued with concerns
about Social Security's long-term viability.

Earlier this summer, House Republican Leader John Boehner questioned
whether the federal government should be giving Social Security
benefits to the wealthy. "If you have substantial, non-Social Security
income while you're retired, why are we paying you?" he said in an
interview with the Pittsburgh Tribune-Review.

The Ohio Republican also suggested raising the retirement age to 70.

"Our view is that Social Security is not perfect, but it's not
broken," said AARP California's Ernie Powell. "The folks who want to
do radical reform want to create doubts that Social Security will be

"It's important to give people a sense of its future. It's not in
crisis, but there are reforms that we need to make to make sure its
solvency continues beyond the 2040s."

For more than 51 million Americans – including disabled workers and
children receiving survivor benefits – Social Security isn't a hot-
button political talking point. It's survival.

The average benefit isn't much: only $1,100 a month. According to
Social Security figures, half of elderly married couples receive 52
percent of their income from the program, as do almost 75 percent of
elderly single people.

Without Social Security, 40 percent of Californians aged 65 and older
would live in poverty.

"If it wasn't for Social Security, I'd be living under a bridge," said
Jeneva Hammonds, 84, who worked seasonally as a Blue Diamond
mechanic's helper.

Her $714 monthly Social Security check, along with her late husband's
small railroad pension, helps pay for the room she occupies at Atria
El Camino Gardens. Even so, she has to tap into her savings to pay for
her rent, phone bill and heart medications.

Retirement these days can be tough enough with Social Security.
Without it, would retirement even exist? For most people, probably

"Social Security was the first government program instituting the
concept that we have a collective responsibility for each other," said
American River College gerontology department Chairman Barbara
Gillogly. "Before that, there was no real concept of retirement.

"Most people worked until they died or were too ill, and then they
were at the mercy of their family and friends."

In the desperate 1930s, the elderly often ended up begging on the

"A lot of older people in the Depression were starving to death," she
said. "People with no other means of survival could go to poor farms.
There were alms houses next to churches. It was demeaning."

For many decades, Sacramento County's poor farm and indigent cemetery
were on the sprawling grounds of the county hospital, the site of
today's UC Davis Medical Center on Stockton Boulevard.

The county home for aging indigent women was a large Victorian house
nestled on the same acreage, remembers Sacramento native and longtime
florist Al Balshor, 87, while the home for aging indigent men occupied
a rambling brick estate on Franklin Boulevard near Florin.

"Mostly, people took care of their own," he said.

For those who couldn't, going to the county poor house was, as Sekula
puts it, a sign of disgrace. Yet census records from the 1930s show
that poor houses across the country were filled with people in their
60s, 70s and 80s.

"You went to the poor house if you were absolutely destitute," Sekula
said. "Nobody wanted to go there."

Of the 6.5 million elderly Americans alive in 1935, only 350,000 had
any sort of pension. The new Social Security Administration
arbitrarily fixed retirement age at 65, based on European pension
models from the 1880s that were predicated on a low life expectancy.

The government also hoped Social Security payments would stimulate the
dismal late Depression economy by getting more money into circulation,
says Gillogly.

Olivia Sparrevohn, 83, remembers that Social Security made a
difference in her grandmother's life. Carrie King Cralle was 68 in
1935, a widow who worked as a secretary and cared for an invalid

Monthly Social Security payments didn't begin until 1940. Before that,
recipients were paid a lump sum. Even so, by 1940, 1 million older
Americans had received money from the program.

"Suddenly, my granny got this check," said Sparrevohn, a retired
technical illustrator who lives in Elk Grove. "She was very frugal. I
know that check was small, but I know it made a difference in her

"I can remember clearly that it was a big thing to her."

© Copyright The Sacramento Bee. All rights reserved.

No comments: