Social Security

Francis Townsend was born in 1867 in Nebraska. Seeking to take advantage of the land boom in California, he moved there only to lose all his money in a risky venture. After working blue-collar jobs for a few years, he decided to enroll in medical school. He practiced for a few years before entering the Army Medical Corps.

When the war was over Dr. Townsend set up a private practice, but was not successful. He took a job as a health director but lost his job in the Great Depression. He was in his 60’s.

According to Dr. Townsend’s autobiography, one day he saw two elderly women going through his garbage looking for food. That got him thinking about a plan to help the elderly get through the later years of their life.

The plan he proposed was that every person over 60 would receive $200/month funded by a 2% national sales tax. The requirements of the plan were:

  • The person had to be retired
  • The person could not have a criminal record
  • The money had to be spent each month to help alleviate the Great Depression conditions.

Starting with a letter to the local newspaper, Dr. Townsend’s idea caught fire. Since the concept was presented in a presidential election year, politicians were very mindful of the twenty million signatures calling for federal approval of what was called the Townsend Plan. Economists hated the plan claiming it would require half of the national income.

President Franklin Roosevelt, responding to the national support for senior assistance, proposed a two-phase program

  • Old Age Assistance – payments to seniors with federal support and state matching support
  • Social Security – employee/employer-funded insurance for retirement years.

The President’s proposal was accepted in 1935.

Supporters of the Townsend Plan continued to advocate for its more generous benefits but support waned over time. While Dr. Townsend didn’t create Social Security, his plan became the catalyst that provided much-needed support for seniors.

Beginnings are often driven by grass-roots support. Today we would call this going viral. The end result of the grass-roots effort may not be a duplicate of the initiative, but the effort becomes the catalyst for action.

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“This law represents a cornerstone as a structure which is being built but by no means completed.” – Franklin Roosevelt

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