One of these programs is
Social Security. Originally called the Federal Old-Age, Survivors and
Disability Insurance (OASDI) it was founded by the Social Security act of 1935.
This program was created out of the need to care for the elderly. During the
Great Depression over 50% of the elderly were in poverty. Congress at the time
complained that this program was "Socialism" and it originally only
included white males.
In addition to Social Security many companies offered
pensions to those employees who worked for a company over many years. The idea
of a pension or promise to pay money, became widely excepted following the
Civil War in which soldiers were paid a pension for their service. Later during
World War II companies agreed to pay employee pensions to supplement social
security and to compensate for fixed wages during war time.
Both Social Security and Pensions were designed to
provide financial care for elderly and retired citizens.
During the 1980s and 90s many companies ended their
pension plans by setting up 401K type retirement funds. These funds were seen
as a way to shift cost from the company to the employee to fund their own
retirement. Some companies made these tax exempt funds appear to be better
deals by offering matching money to the employee contribution. Companies who
established 401K plans quickly ended their pension programs and employees were
told they got a good deal.
Republicans in general continued to sell the 401K plans
and many went so far as to suggest that Social Security be changed to a similar
private retirement plan. It was great. Each employee was told they control
their future retirement income. They could save as much as they wanted up to
the 401K limits of about 12% of income. For most workers this was not very
much. Then the stock market crashed in 2008 and 401K plans went to hell. Plans
that were dependent on stock earnings began to earn much less. Retirees began
to see their funds decline. For many it means working until they die and living
on Social Security.
Turns out those socialist big government programs were
really better in the end than trusting your employer's pension and buying into
the 401K hoax. So when you hear talk about the danger of Big Government
programs remember the only money you can really count on is the government
program from 1935 that was called socialist when it began. 30 years from now
people will thank us for the Affordable Care Act.
