The President’s State of the Union message on Social Security demonstrates a fundamental misunderstanding of the ideals of the program begun by Franklin Roosevelt. The President is pushing the idea that Social Security is only a retirement savings program for individuals. This unfortunately misses the essential role of Social Security in promoting economic stability and income stability for the most vulnerable members of our society.

Let me take the economic stability purpose first, as it is the least recognized today. Social Security was one of the programs President Franklin Roosevelt developed to get us out of the Great Depression. The plan originated in the thinking of Francis Townsend, an elderly doctor, who argued that the government should provide a $200/ month pension to all Americans over 60, with the provision that all the money be spent every month. The idea was that such payments would recognize the contribution of elders to building the Nation, but more importantly, it would also stimulate the economy. The feeling of most economists was that the Depression was due to low consumer demand. In the Roaring 20’s businesses had expanded recklessly, so when the Stock Market Crash of 1929 burst the speculative bubble, there were simply too many businesses providing too many goods for consumers to buy it all. When businesses closed and laid off workers, the problem of low consumer demand only spiraled, leaving unemployment as high as 25%! Supporters of Townsend’s idea formed a grass-roots political movement to push the idea that their plan would make up for this low consumer demand, for Townsend pensions would create a permanent cushion of consumers whose stable spending could pull the U.S. out of recessions and depressions.

Roosevelt’s Social Security plan ultimately accepted the Townsend idea, if not the plan’s specifics. The maximum benefit was initially set at only $15/ month and excluded many. But from there Social Security expanded to offer more generous benefits to more and more Americans. The result has been, perhaps, the most successful program the Federal Government has created. Social Security has largely eliminated dire poverty among the elderly, and we have had only short, relatively mild recessions rather than depressions since 1940.

The ability of Social Security to maintain consumer demand in the face of economic downturns is a crucial element of the program that the President’s privatization plan undermines. If Social Security taxes go into private accounts, then the returns on those accounts may fall greatly during the inevitable recessions of the future. This drop in income from private accounts could push down consumer spending right at the point when the economy needs it most, pulling away that cushion that softens the landing in a recession and bounces us forward. Indeed, encouraging people to join the stock market could fuel speculative economic bubbles, making worse recessions and, yes, depressions more likely in the future.

The President’s privatization plan also ignores the fact that Social Security provides benefits to the disabled, orphans, and widows as well as retirees. These people would be exposed to the same significant cuts in benefits the President proposes for everyone, regardless of whether they opt for private accounts or not. Based on details put forward by the President’s advisors (but curiously absent from his speech) the Center for Budget and Policy Priorities estimates these cuts will be around 27% if you were born in the 1970s and 34% if you were born in the 1980s.

Now, the President argues that high rates of return on private accounts will make up for these cuts (but that’s an unsure gamble), but widows, orphans and the disabled are unlikely to have accumulated much in those accounts at the time tragedy strikes them. The result will be a significantly reduced standard of living for the most vulnerable members of our society.

But of course that is the point of the President’s plan: to erode the idea that we have a responsibility to other members of the society. This is the mission of a far right-wing agenda, not saving Social Security. The Social Security of Franklin Roosevelt was premised on the idea that our interdependence necessitated that we work together for the public good, both the good of economic stability and the good of income security for all. The ideal of the President’s plan, in contrast, is for us to gamble and seek our own private good with private accounts and hide the fact that Social Security is about the public good at all.