Without question, the most important piece of legislation
to emerge from the New Deal was the Social Security
Act of 1935.
Never intended as a “welfare program,” Social Security
was designed as social insurance.
Employers withhold a portion of their employees’ wages,
match these amounts, and transfer these sums to the
government. Self-employed individuals pay into the
system at a higher rate.
The government places Social Security receipts in a trust
fund from which benefits are paid to retirees and
surviving spouses and dependents.
The amount of retirement benefits one receives is a
function of how much one has paid into the system.