Social Security Dilemma

One of the first Americans to propose a system of economic security for U.S citizens was Thomas Payne in his 1795 writing titled "Agrarian Justice". It provided sums for citizens reaching the age of 21 and then a yearly payment to those reaching 50. Payne’s idea was to pay for it by means of a property inheritance tax.
In 1862, a Civil War pension program was enacted. "Following the Civil War, there were hundreds of thousands of widows and orphans, and hundreds of thousands of disabled veterans. In fact, immediately following the Civil War a much higher proportion of the population was disabled or survivors of deceased breadwinners than at any time in America’s history. This led to the development of a generous pension program, with interesting similarities to later developments in Social Security" (DeWitt, sect. Civil War Pensions, para. 1). The program evolved, starting with benefits only to those disabled in combat or to their surviving families. As time passed, veterans disabled for any reason could receive payments. After that, aged veterans were added. Later, disability and old age benefits were extended to include family members. Former Confederate soldiers were not allowed any benefits. The last payments to surviving widows of Civil War veterans were made in 1999.
State Old-Age Pensions, para.1). Prior to the passage of the original Social Security Act in 1935, thirty states had adopted some form of old-age pension plan. Only about 3% of the elderly were actually collecting benefits under the state plans. There was a lack of implementation of the laws. The plans allowed insufficient funds. The elderly faced restrictive plan entry rules. The receipt of benefits was stigmatized as "welfare".