Catfood

A few bloggers have highlighted yesterday’s piece by Delaney and Grim at the Huffington Post, many of them concentrating on the Dickensian conditions that prevailed before Social Security and the New Deal-

The talk of taking Green’s children was no vacant threat. In most states, children were not allowed to live in poorhouses. Families forced into them would be split up, with children either bound for orphanages, foster homes or apprenticeships. Pennsylvania, which banned poorhouses from hosting children between the ages of two and 16, was typical. Hundreds of children in just one home, the Chester County Poorhouse, were “bounded out” — given to other families — in the middle of the 19th Century, according to an archive of their names that survives.

In 1936 a woman’s aunt and uncle hoped to extract their niece and her new baby from a poorhouse in New Hampshire. They sent a letter to a county commissioner saying they would take care of the hapless pair at their home, but the commissioner wouldn’t allow it, according to Wagner. The commissioner didn’t doubt their ability to provide, but he figured the woman would have another burdensome baby. “If I am presented with definite proof from the Merrimack County Farm, that [she] has had a sterile operation, I have no objection to her going to live in your home.”

The unemployed who were denied outdoor relief by the city had another option: To be auctioned off to the lowest bidder and live as a boarder. The city would reimburse the homeowner for the specified amount in exchange for putting the pauper up. The jobless person was expected to work without pay in exchange.

And there are lots of stories like that in it, but I’d like to draw your attention to some of the more modern events they are reporting-

The Poorhouse: Aunt Winnie, Glenn Beck, And The Politics Of The New Deal

Arthur Delaney and  Ryan Grim, The Huffington Post

12-29-10 10:08 PM

Though Republican hostility to the New Deal isn’t new, the Democratic embrace of language that has long been used to undermine belief in government is. Announcing a pay freeze for federal workers, Obama reasoned that “small businesses and families are tightening their belts. Their government should, too.” With nearly one in ten people unable to find work, Democrats compete with Republicans over who can sound more concerned about the debt and deficit, despite a longstanding economic consensus that a deficit is a good thing to have in times of slow growth and high unemployment.

What is dangerous about Social Security is that it works. It is evidence that people can do a better job insuring against life’s cruel downturns by working together and pooling resources than by going it alone in the market. If the financial market and its representatives in Washington succeed in undermining Social Security, they will not only have access to trillions of dollars, but will have dealt a blow to a leading symbol of the potential collective action. It’s no coincidence that cutting Social Security is often described as a “signal” to financial markets. Even Obama, after his election, echoed such language. “We have to signal seriousness in this by making sure some of the hard decisions are made under my watch, not someone else’s,” Obama said before his inauguration.

…

During a meeting with progressive bloggers, Obama was asked to defend his administration’s failure to stem the foreclosure tide. The president’s worry, he said, was that his anti-foreclosure program might accidentally help people who didn’t deserve it. “The biggest challenge is how do you make sure that you are helping those who really deserve help, and, if they get some temporary help, can get back on their feet,” Obama said, specifically adding that he didn’t want the effort to assist “people who through no fault of their own just can’t afford their house anymore because of the change in housing values or their incomes don’t support it.”

…

Obama’s confusion about Social Security’s origins would seem mundane if it weren’t for the payroll tax holiday he pushed, the deficit commission targeting Social Security he created, and the reports that he’ll call for cuts to the program in his State of the Union address.

Social Security reform is necessary, the program’s opponents say, because its future solvency is in question: As a result of the Baby Boom and advances in medicine, more people are living longer. But the actuaries who set up Social Security in the 1930s forecast with an eerie exactitude how much life expectancies would increase — a detail that is always ignored. And the system was reformed by the Greenspan Commission in 1983, when the first Boomers were nearly forty years old. Nancy Altman, a boomer herself, served as a top aide to that commission, and said that it very specifically took into account the coming wave of retirements, which explains why it can pay full benefits through 2037, a quarter century after the first Boomer hits early retirement.

Social Security’s actuaries reported this fall that after 2037, payroll taxes would be sufficient to pay nearly four-fifths of benefits through 2084. The payroll tax stops, however, at a little over $106,000. The shortfall could be made up entirely by applying the payroll tax to more income above that threshold.