Social Security Act Research Paper

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How did the Social Security Act Affect the United States? The United States fell into a major economic low point in the late 1920’s known as the Great Depression that expanded into the 1930’s. The preceding decade; however, was a time of economic prosperity and fortune for Americans in the United States. Improved jobs, wages, and technology allowed for increased wealth among most families in the U.S. This success came to an end with the stock market crash of 1929. Also known as the Great Crash, the stock market crash resulted in $30 billion in stock value to disappear in addition to people’s hopes of permanently keeping their wealth (Nash 419). As people began losing their jobs, depression, or a period of extended and severe decline in…show more content…
As part of the Act, the Old-Age insurance program provided the elderly with security by offering them money. Because they often had no money, a deficiency in resources, and/or had retired, the federal government collected taxes from employers and employees to give to the elderly (Lewis 907). The first American to receive a social security check was Ida M. Fuller in 1940. The benefit was valued at $22.74 per month which was based on her monthly wages from job she once held. Fuller would collect the same amount for the next ten years, and by the time she died in 1975 she had received a total of about $22,888 (Lewis 907). Frank Bane, the Executive Director of the original Social Security Board, stated, “[The Social Security Act] has cushioned the risks of life and living in our industrial age for millions and millions of our fellow citizens. It has shored up the floor of our economic structure, and it has contributed enormously toward tempering the impact of depressions and converting them into relatively mild recessions” (Bane paragraph 2). The benefits offered to the elderly fought against the Depression and “cushioned” the risks it had. It turned the economic collapse the United States was facing into minor consequences. The monthly pension the elderly were offered by the Act kept them safe from the…show more content…
In order to afford the benefits given to the elderly, the federal government used payroll taxes. Employers and employees were both taxed to furnish the government with the money it needed to adequately dispense the benefits. Furthermore, the Act was estimated to reach an annual taxation bill of $2.6 billion by 1949 and 3.4 billion by 1980. The employers and employees had little to say about this taxation, and many believed that this would lead to the demise of Social Security (“Social Security Act Is Viewed As Jobs Diminisher” 1935). The Christian Science Monitor, a newspaper, stated, “‘Between the steady, dependable, competent worker and the irregular, unreliable and incompetent one, the burden of taxes and benefits is disproportionately in favor of the later....’” (“Social Security Act Is Viewed As Jobs Diminisher” 1935). The benefits are in favor of the incompetent workers because of the taxes being imposed on the competent workers. The victims of the taxes imposed by the federal government were irate, yet they had little say in changing the Act. Nonetheless, they had a great impact on the U.S. economy. In time, the money that was collected and given to the elderly was passed on back to the economy. This is because of Title II of the Act stating that the money must be spent in a month 's time in order to pass the requirements to receive the benefit. When spent, the money
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