Public Benefits #2 in Minneapolis, MN; Bankruptcy and public benefits.
Welcome back to our series of blog posts on the history and philosophy of the economy, bankruptcy, and debt – today we continue to discuss public benefits, specifically social security and other 20th century public benefits.
As the great depression pushed existing social insurance programs to their breaking points, President Franklin D. Roosevelt advocated for and Congress passed the New Deal, which among many other provisions, involved the enactment of the Social Security Act in 1935. The funding of the program is slightly out of scope for this post, but suffice it to say it was primarily funded by payroll taxes levied on both employees and employers. The idea of a sort-of federally funded pension plan had been formulated several years before, but remained controversial. Some of the initial criticisms aimed at the program are eerily similar to those levied today, including the notions that the program amounts to “socialism” as well as criticisms from farmers and the self-employed that they have to pay both the employer and employee contributions. Nonetheless, the program helped older adults retire, opening up jobs for the unemployed and depressed younger people, which was a noteworthy antidote to growing unemployment and the depressed economy.
The initial program had many structural and policy problems though. Generally, the benefits were available to men who had been fully employed throughout most of their lives. Women, children, migrant workers, and minorities were all less likely to have full time work through an employer, so they were often denied the benefits. I think this is relevant for our discussion today because this incarnation of social security truly is a public pension program, rather than a public benefit such as welfare. However, the social security administration also came to operate other welfare programs to be discussed in the next post, such as SSI and SSDI.
CALL NOW FOR A FREE STRATEGY SESSION FROM A MN BANKRUPTCY LAWYER AT LIFEBACK LAW FIRM
I’ve already buried the lead, but, everyone should know: your social security money cannot be garnished, seized, or taken in a bankruptcy. If you are interested in the history and philosophy of the economy, bankruptcy, and debt, stay tuned for my blog posts. And, if you are thinking about filing, reach out to us in Minneapolis, MN at www.lifebacklaw.com.
