I was very confused by this passage on p. 177 of Senator Obama’s THE AUDACITY OF HOPE:

…FDR recognized that we would all be more likely to take risks in our lives — to change jobs or start new businesses or welcome competition from other countries — if we knew that we would have some measure of protection should we fail.

That’s what Social Security, the centerpiece of New Deal legislation, has provided — a form of social insurance that protects us from risk.

I guess I don’t understand this because the fact that I have a Social Security account that I’ve been paying into for the last umpty-ump years doesn’t enter into my calculus on whether to change jobs or anything else. Nor do I see how Social Security protects anyone from risk. If you lose your job, or your business fails, you don’t start drawing Social Security — in fact your overall Social Security status is hurt because you’re no longer paying into the system.

So if someone could explain that to me such that it makes sense, I’d appreciate it.

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0 Responses to More AUDACITY

  1. Gray Rinehart says:

    I didn’t realize the original Social Security Act was envisioned (or perhaps advertised) as unemployment insurance; I thought its sole purpose was to allow older folks — especially those without company pensions — to retire, to keep jobs opening up for the younger cohort. And I didn’t think about the larger relief programs that were in effect at the time.

    Regardless, I don’t see it as a program intended to encourage people to take risks. Seeking “security,” after all, is quite opposite from seeking “risk.”

    Thanks, Bro!

  2. galtbrown says:

    Remember that the Social Security Act of 1935 was touted as unemployment insurance, but in reality was Federal involvement in old-age pensions where many, if not most did not have them to begin with. This is, arguably the most extreme manifestation of Progressivism in its generic sense. Also remember that if you fell flat on your whatszits, there were oodles of other federal and State agencies operating during FDR’s first term, most notably the Home Owners Loan Corporation and the Federal Emergency Relief Agency, both of which essentially handed out free money on the dole, money the Treasury was printing hand over fist, since FDR had taken us off the Gold Standard as soon as he was in office, (oh and by the way, told everyone they had to turn in their gold coinage under pain of confiscation and imprisionment for hoarding.) This was an experiment involving deliberate inflation, an experiment that frankly worked pretty well, as long as Uncle Sam kpet handing out all that free money, which FDR stopped in his second term, the resulting recession wiping out all of the gains of his first term. What really ended the Depression was Defense expenditure beginningg in 1939. Back to your question though, Obama is giving credit to the Social Security Act where it does not apply – while it might apply to the Relief efforts of FDR’s first term as a whole is another issue.