Student Question
What were the impacts of the Social Security Act during the Great Depression?
Quick answer:
The Social Security Act, enacted during the Great Depression, aimed to provide financial aid to retirees, the disabled, and the unemployed. Initially, its funding through employer and employee taxes hindered economic recovery, contributing to the 1937 recession. However, it established a crucial safety net, reducing reliance on family support for the elderly and laying the foundation for the modern welfare state. Despite limited initial benefits, it significantly improved financial security for vulnerable populations.
The Social Security Act was passed during the Great Depression. The original purposes of Social Security were to provide people with some financial resources during retirement or in cases of disability or unemployment. While its goals were to provide immediate help to some to some degree to people, the main portion of the Social Security benefits process didn’t begin until the early 1940s. Since Social Security was financed by taxes on both employers and employees, it actually acted as a drag on the economy and helped contribute to a recession in 1937. Thus, the initial impact was harmful to the economy because along with less government spending on jobs programs, businesses and individuals had less money to invest and spend because of the taxes from Social Security. However, eventually, Social Security provided the safety net that people came to expect from our government during difficult times. Today, Social Security is...
Unlock This Answer Now
Start your 48-hour free trial and get ahead in class. Boost your grades with access to expert answers and top-tier study guides. Thousands of students are already mastering their assignments—don't miss out. Cancel anytime.
Already a member? Log in here.
an essential program for many people.
References
What was the role and impact of the Social Security Act during the Great Depression?
In 1935, the federal government introduced the Social Security Act to provide an old-age pension for people aged 65 and over. It also enabled the states to make provide better welfare provision for the elderly, blind people, children and mothers. At the time of its introduction, America was in the grip of the Great Depression when many members of society battled poverty, unemployment and deprivation. This Act represents the beginning of social welfare in America: a safety net for people who are unemployed, injured at work or retired which guarantees a monthly payment to meet the basic costs of living.
For the elderly, the Social Security Act only covered people who were already over the age of 65 and did not give out very generous amounts of money. Its impact, however, was pretty huge: the recipients were no longer reliant on their families to financially support them and they could retire without worrying about the future.
References