Humans forget so quickly how even their grandparents’ generation lived. A quarter century ago, there really wasn’t today’s concept of retirement, where one looked forward to spending one’s golden years on all of the leisures and adventures one was too busy or poor for while in their working years. If you were of the working class before Social Security became law in 1935, you simply worked until you could not anymore.

Those unable to work almost always moved in with their children. Those who had no children or whose children were unable or unwilling to support them typically wound up in the poorhouse. …

In 1930, the New York State Commission on Old Age Security found that “worthy people are thrown together with whatever dregs of society happen to need the institution’s shelter at the moment; sick people are thrown together with the well, the blind, the deaf, the crippled, the epileptics; the people of culture and refinement, with the crude and ignorant and feeble-minded.”

“Privacy, even the most intimate affairs of life, is impossible; married couples are quite regularly separated; and all the inmates are regimented as though in a prison or penal colony,” the commission reported. …

Poorhouses and destitute senior citizens were a fact of life well before the Great Depression. Surveys in Wisconsin and New York, published in 1925 and 1929 respectively, found that almost half of the population aged 65 and older had “insufficient subsistence income.”

This from The Battle for Social Security: From FDR’s Vision to Bush’s Gamble by Nancy J. Altman, which does an excellent job taking the reader through the design, disagreements about, and changes made over the life of the program. In another book I’ve just started, In the Shadow of the Poorhouse: A Social History of Welfare in America by Michael B. Katz, he explains that, “the availability of work for every able-bodied person who really wants a job is one of the enduring myths of American history.” In reality, “for most people, work remained unsteady as well as seasonal.” Further,

There never was… any work “whatever, how disagreeable, or loathsome, or dangerous, or deleterious soever it may be, or however reduced the wages,” that did not “find some persons willing to follow it, rather than beg or steal.”

Usually low to begin with, wages frequently were reduced. For instance, in one Philadelphia cotton mill, handloom weavers making cotton ticking earned one dollar per cut in 1820, seventy cents in 1833, and sixty cents in 1840. When wages were reduced, Walter Channing pointed out in 1843, the effect was not only to lessen “the amount paid to each” but also to discharge “from regular employment a certain number of operatives.” The net effect left large numbers of people suddenly “without the means of subsistence for themselves, and for their families. These last, after no very long time, must become dependent on foreign aid for support. They are made paupers.”

This was a time without workers rights or social safety nets. The all-knowing market did not (and does not) make accommodations for all to put aside savings for old age, let alone what would qualify as a living wage for immediate needs. Workers do not have the luxury to just not work if they don’t find favorable conditions. It is from this reality that Social Security was envisioned. Back to Altman’s book:

President Roosevelt envisioned much more than a program that would keep people out of poverty, or even one that provided wage replacement up and down the income scale when work was no longer possible. Roosevelt wanted beneficiaries of the program–virtually every man, woman, and child in the United States–to have the confidence and peace of mind that they would be financially secure at retirement and in the event of lost wages due to tragedy.

For all of the rampant inequalities of the time, there was still this vision that those who worked hard, and not just those who managed through luck in birth or afterwards to secure wealth, deserved to have earned security from destitution. Social Security was designed, as so few things seem to be these days, in the interests of the people. Benefits for qualifying events last as long as you live, or longer for spousal benefits. Workers are free to move between jobs or states. Taxes paid result in a clearly defined benefit level; the worker is not left to the whims of the market or the success of their employer as to whether their benefit will be paid down the road.

These assurances are possible because everyone’s risks are pooled together. Income, outgo and operating costs are transparent and clearly publicized. Funds are placed in Trusts which are required to be spent for the good of the beneficiaries and which are invested in Treasury bonds which have stable, guaranteed returns.

Despite the concession that private accounts would have higher administrative costs than the current system, and provide no guaranteed benefit, placing all of the risk back on the worker, propaganda against Social Security has successfully sullied the image of Social Security to the point where it is nearly impossible to find a mention of it anymore without the claim of its fundamental brokenness stated in the same breath. This is an affront to our nation’s history. Claiming that Social Security is bankrupt profoundly misunderstands the differences between the program’s 75 year actuarial projections, and the funding of other government programs.

Altman speaking about the second Bush administration’s attempt to convince the public that Social Security was in crisis:

Out of all federal programs, Social Security was being singled out for alarmist claims about bankruptcy because it operated under the conservative principals of a balanced budget and long-range projections. No one ever pointed out that if deficit spending were the definition of bankruptcy in a federal program, then the entire federal government–other than Social Security–had been bankrupt for 20 years. During the prior two decades, the government had run deficits every year with the exception of 1969.

This is in particular contrast to the emergency appropriations bills, not included in the official budget or budget deficit calculation, used in funding the Iraq and Afghanistan wars.

The 1994-1996 advisory council had not agreed on much, but it made one very valuable contribution. Its report included the appendix that stated that “the fundamental ratio of beneficiaries to workers was fully taken into account in the 1983 financing provisions and, as a matter of fact, was known and taken into account well before that.”

But the myth that the aging baby boomers would wreck Social Security was such a good sound bite. It was so much punchier than the shortfall’s true cause, explained by the 1994-96 advisory council: “The current deficit…result[s] from an accumulation of relatively small annual changes in the actuarial assumptions and in the method of making the estimates.”

The long range shortfall in Social Security’s income to outgo obviously must be addressed. But there is nothing, other than special interests spreading misinformation, preventing us in making adjustments to bring the program back into actuarial balance, just as adjustments have been made multiple times already. I would very much like to receive my own social security benefits, but at this point we seem to lack the initiative and sense to protect the general public from the special interests whose reckless behavior dragged the country into the ongoing Great Recession. In response, we have handed the health insurance industry huge profits in exchange for a few points of basic decency and in blindly accepting the claim that Social Security is broken, we ask for another helping from the financial services industry’s demonstrated exclusive interest in raking in profits at the expense of everyone else.