What Kind of Country Would We Be Without Social Security?

President Obama posed it as a rhetorical question. One answer, based on our history: a place where states ran old age pensions.

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In President Obama's speech on jobs and the economy Thursday night, he asked, "What kind of country would this be if this Chamber had voted down Social Security or Medicare just because it violated some rigid idea about what government could or could not do?" I am almost certain that I know the answer, at least when it comes to the former program, and the answer is neither the Marco Rubio fantasy, where private charity, churches and families take care of poor old people, nor the imagined liberal world where no one takes care of old people. Had Congress not passed Social Security, we'd be the kind of country where, during the Great Depression, various state governments passed pension programs, some of them more radical than Social Security, others less so.

After all, the impetus for Social Security wasn't a proposal by President Roosevelt and his staffers, it was a bottom up grassroots movement of older Americans. If their national movement to pass something like the Townsend Plan's $150 per month for people over 60 had been completely stymied, popular support for old age pensions would've flowed into state plans.

As the Los Angeles Times noted awhile back, "Even after Social Security became law, about 80 old-age pension proposals competed for support in California alone," including the most well known, "Ham and Eggs." It called for "an amendment to the state Constitution that would guarantee $30 in state warrants or scrip each week to every unemployed man or woman 50 or older. Each $1 warrant would require recipients to pay a 2-cent weekly tax to keep the note valid until redeemed. This would encourage people to spend the money, thus boosting the economy -- or so the theory went. The Allens collected nearly 800,000 signatures -- along with more than $300,000 -- and got the measure, Proposition 25, on the November 1938 ballot." It received 45 percent of the vote. If not for the passage of Social Security a few years prior, would "Ham and Eggs" or some other old age pension proposal have garnered a boost in the polls to get it above 50 percent?

Almost certainly. And given the role California played in World War II, it is difficult to argue that the plan would've cost the state residents or prosperity. I know a lot less about other states during that era, but enough to be confident that California wasn't alone in having strong support for old age pensions. So I can't help but wonder how things would've turned out if different states passed different programs. It's easy to imagine an influx of old people into places with the most generous benefits, and state politicians who tried to restrict access to newcomers, but again, World War II and its aftermath involved so much relocation that its effects would've presumably overwhelmed all other factors in the near term.

Would we have been better or worse off with a patchwork of state programs? My guess is that on the discrete issue of old age pensions we'd be worse off, but that we'd also enjoy a healthier relationship between the state and federal governments. But I could be completely wrong. The true answer is just unknowable, and if I could go back in history, Quantum Leap style, to change things, I wouldn't. In the years after the passage of Social Security, America became the most wealthy and powerful country in the history of the world. Why risk that outcome on an unprovable hunch that maybe we could've had it even better?

Image credit: Flickr user JeffreyW