essay resources - Social Security Bulletin Vol 70 No 3 2010...

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Unformatted text preview: Social Security Bulletin, Vol. 70, No. 3, 2010 1 Conceptual Foundations and Historical Precedents This section provides a high-level overview of the historical background and developments leading up to the establishment of the Social Security system in the United States. The Origins of Social Insurance Economic security is a universal human problem, encompassing the ways in which an individual or a family provides for some assurance of income when an individual is either too old or too disabled to work, when a family breadwinner dies, or when a worker faces involuntary unemployment (in more modern times). All societies throughout human history have had to come to terms with this problem in some way. The various strategies for addressing this problem rely on a mix of individual and collective efforts. Some strate- gies are mostly individual (such as accruing savings and investments); others are more collective (such as relying on help from family, fraternal organizations and unions, religious groups, charities, and social welfare programs); and some strategies are a mix of both (such as the use of various forms of insurance to reduce economic risk). The insurance principle is the strategy of minimiz- ing an individual’s economic risk by contributing to a fund from which beneFts can be paid when an insured individual suffers a loss (such as a Fre that destroys the home). This is private insurance. The modern practice of private insurance dates at least back to the seventeenth century with the founding in 1696 of Lloyds of London. In America, Benjamin ¡ranklin founded one of the earliest insurance companies in 1752. Historically, private insurance was mainly a way that the prosperous protected their assets—principally real property. The idea of insuring against common economic “hazards and vicissitudes of life” (to use President ¡ranklin Roosevelt’s phrase) really only arose in the late nineteenth century in the form of social insurance . Social insurance provides a method for address- ing the problem of economic security in the context of modern industrial societies. The concept of social insurance is that individuals contribute to a central Selected Abbreviations CES Committee on Economic Security COLA cost-of-living adjustment ¡RA full retirement age GAO General Accounting OfFce (now known as the Government Accountability OfFce) RET retirement earnings test SSA Social Security Administration SSI Supplemental Security Income * Larry DeWitt is a public historian with the OfFce of Publications and Logistics Management, Social Security Administration. Note: Contents of this publication are not copyrighted; any items may be reprinted, but citation of the Social Security Bulletin as the source is requested. To view the Bulletin online, visit our Web site at The Fndings and conclusions presented in the Bulletin are those of the authors and do not necessarily represent the views of the Social Security Administration.presented in the Bulletin are those of the authors and do not necessarily represent the views of the Social Security Administration....
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This note was uploaded on 03/30/2012 for the course COM156 156 taught by Professor Charpentier during the Spring '11 term at University of Phoenix.

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essay resources - Social Security Bulletin Vol 70 No 3 2010...

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