The Need for Financial Security

Social Security SystemAll people want financial security, regardless of how old they are. But especially when persons are advanced in years does the need for such security become more urgent. They are at the time in life when they have to work less, or even retire. But they still want to live in reasonable comfort and dignity.

To assist the elderly, und andere, many countries throughout the world have “social security” systems. These are usually plans for providing benefits such as pensions for elderly persons, income for the disabled or unemployed, and medical care for those who cannot afford it.

One of the largest social security systems in the world is in the United States. Since that country is a main foundation of the Western world’s economy, what happens to its social and financial affairs is of great interest elsewhere.

People throughout the world might expect that the United States, with all its wealth and resources, certainly would have an adequate system for taking care of needy persons. This would include reasonable security for the elderly who retire after a lifetime of hard work.

Jedoch, is this the case? Many authorities are now saying, No. They claim that there are serious and growing problems, as well as great concern over the nation’s social security system.

Basic Problems

Among the problems related to social security are two basic ones: (1) How to pay the growing costs for the increasing number of persons eligible for benefits; (2) The fact that the benefits by themselves do not provide reasonable security for many, particularly the elderly.

Some economists say that the problems are not severe. But others say that they are genuinely “alarmed” at the growing difficulties. Indeed, a headline in a Detroit newspaper asked: “Social Security Now a Fraud?” The article suggested that it was.

The first major problem, how to finance the program, is now coming into clearer focus. It is obvious that the present means of financing the benefits are becoming inadequate. Thus, U.S. News World Report stated:

“The huge social security system for the aged, their dependents and survivors, and the disabled is in serious trouble. . . .

“Simply put, the problem is that benefit costs have raced ahead of income.”

The publication also noted that by the early 1980’s “the key retirement and survivors part of the system will be bankrupt.” Similarly, the American Institute for Economic Research declared: “The Social Security Act has become a time bomb, ticking off the short years to financial disaster.”

Regarding the other major problem, whether the benefits provide adequate “security,” many persons have strong feelings that they do not. The elderly in particular feel that way. And the sad fact is that in the United States, as in a number of other countries with similar programs, the largest group of people living in poverty is the elderly!

A Hilfe

This is not to say that there are no good features of such programs by governments. Certainly any financial help to the elderly, ill, unemployed and incapacitated is valuable and appreciated.

Why, it was not long ago when there was no assistance at all by government. Only within this century, indeed, within just the past few decades, have government payments for the elderly and others in need become widespread in most countries. Jedoch, many societies in times past were rural and lived off the land. Usually, families took care of their own elderly folks, and friends would help.

But with the onset of the industrial age, workers left the farms by the millions and crowded into cities, where the factories were located. Especially was this the case in Europe and North America. In the cities families and relatives tended not to be as close as before. Friendships were more difficult to cultivate. So relatives and friends were not as likely, or able, to help to care for the needs of the elderly as when they all lived as closer-knit units in a rural society.

But as the industrial labor force grew in strength, it was able to bargain for more benefits. Gradually governments were pressured to help.

Among the first industrial nations to put into operation some sort of social security arrangement was Germany. Accident insurance was introduced there in 1883, and health insurance the next year. Compulsory social security assistance came in 1891.

The need for government help became far more apparent after the Great Depression of the 1930’s. Then millions of people were thrown out of work in all the industrial lands. For instance, the book Social Security in Canada says of that land: “The widespread unemployment during the depression of the 1930’s forced the development of a number of unemployment assistance measures.”

In the United States, President Franklin D. Roosevelt signed the Social Security Act into law in 1935. At first, only retirement benefits were provided. Later, survivor benefits were added. Then the program was broadened to include disability and unemployment benefits.

Im 1975 more than thirty million individual Americans received regular monthly cash payments from the government for the old age, disability and survivors provisions of the act. More than ten million received unemployment benefits in the recent recession, and millions of others got help for medical bills, for dependent children and for other reasons.

But in most lands the largest element in social security payments are those made to elderly retired people. Usually, the retirement age is about sixty-five, with reduced benefits if one chooses to collect earlier, for instance, in the United States, at the age of sixty-two.

How are such payments under social security financed? What are the benefits? Are they enough for one to live decently? And is the American system really in trouble?

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