Amanda Stanhaus

Tag: united states of america

Social Insurance: Current North American Debate

Originally submitted for an independent research project comparing North America’s welfare states with Professor Antonia Maioni at McGill University.

North America’s policy makers and interest groups debating the future of their respective welfare states have lost sight of the important role of social insurance in a capitalist system. J. Donald Moon understands a democratic welfare state to be “an attempt to solve a serious moral dilemma that necessarily results from the central role of markets in modern society.”[1] Moon defines self-respect as, “one’s belief that one lives up to certain standards that define what it is to be a person of worth,” and its preservation is key to an ideal democratic welfare state.[2] Moon’s argument features T.H. Marshall’s explanation of civil, political, and social rights that facilitate equal citizenship; together these rights create equal social worth, genuine equality of respect, and consequentially, the ideal democratic welfare state.[3] To create an ideal democratic welfare state that preserves self-respect, Moon outlines the three “institutional principles” of a welfare state: achieving full employment, ensuring universal provision of social services, and establishing a comprehensive program of social insurance.[4] Moon recognizes his “institutional principles” have internal limits and various implementation options, but in general they allow for social rights to be exercised, while maintaining self-respect.[5] Moon’s argument and his “institutional principles” represent the North American consensus that created their unique liberal welfare states. Now lacking a consensus view of Moon’s “institutional principle” of social insurance to shape program reform, misinformed interest groups dominate the retrenchment debate that is resulting in reforms dismantling the social insurance programs of North America’s liberal welfare states.

Given the capitalist systems of North America’s liberal democracies, social insurance is a moderate fix. When discussing common risks, such as birth into a poor family, ill health, involuntary unemployment, etc., Theodore R. Marmor, Jerry L. Mashaw, and John Pakutka explain that “beginning with Otto von Bismarck…the social provision of income protection against these risks has been a fundamental precondition for the flourishing of industrial capitalism. Looked at historically, social insurance is a deeply conservative idea and the major viable alternative to state socialism.”[6] Marmor, Mashaw, and Pakutka describe social insurance’s original goal “to cushion workers and their families from the many threats to economic security that capitalism produces while, as the same time, permitting the market economy to produce its undeniable gains in national income.”[7] However, social insurance must adapt to reflect current realities of its beneficiaries, as Marmor, Mashaw, and Pakutka explain, “[programs] that fit well in one era can become outdated in another. A society’s underlying sense of ‘fairness’ or ‘appropriateness’ in guarding against risks to loss of income from work can change as well.”[8]A philosophical consensus and resulting reforms must reflect the times to be relevant. Lacking a consensus view of social insurance, program reform debate is commanded by interest groups that promote retrenchment.

Lacking a consensus view in favor of social insurance, interest groups calling for privatization of social insurance programs in North America are shaping the program reform debate. The circumstances of both the U.S. and Canada are similar, Keith Banting and John Myles note, “Organizations that speak on behalf of the poor are weaker, and power has moved to institutional niches less responsive to redistributive interests.”[9] Traditionally, Banting and Myles describe liberal welfare states as: “reluctant to replace market relations with social rights; instead, they seek to provide a safety net for the ‘poor’ and to encourage the bulk of the population to rely as much as possible on private sources of economic security, including occupational benefits and personal savings.”[10] Critics of the welfare state and its social insurance programs are using this liberal welfare state tradition to their advantage. Banting and Myles explain, “the redistributive role of the state has always been less developed…In liberal welfare states, mere drift in social policy can represent a victory for conservative interests.”[11] The structure and tradition of North America’s liberal welfare states is facilitating program reform debate that lacks a common vision and is dominated by misinformed interest groups.

Liberal welfare states are being highly scrutinized due to an ideological shift that now supports reform to increase privatization and individual responsibility. Yet, critics misconstrue the role of social insurance in a capitalistic market. Marmor, Mashaw, and Pakutka explain critics’ understanding of social insurance, “Rather than being seen as supporting a capitalist system by cushioning its inevitable risks, social insurance arrangements are portrayed as undermining private markets and personal responsibility, or as threatening the overall fiscal health of the nation.”[12] Inherently, the payment and services of a social insurance system are inefficient. But, when these risks are insured publicly it is comparatively more efficient than when these risks are insured privately. Social insurance programs are essential to the maintenance of market capitalism as Marmor, Mashaw, and Pakutka explain, the risks insured by social insurance are not sufficiently dealt with in private insurance markets.[13] If a welfare state’s social insurance programs are privatized, insurance premiums will quickly become unaffordable, because of the problems of adverse selection–only the highest-risk people will sign up for insurance–and moral hazard–those insured will take on extra risks because they face no downside.[14] For example, if it is a personal choice to sign up for health insurance, only those who would utilize the insurance (i.e. those already sick) will register, and then premiums would exponentially increase, as the risk is concentrated among a small sick population. Public social insurance programs that provide coverage for large and various groups are the best way to spread risk and control costs. Marmor, Mashaw, and Pakutka explain that social insurance already provides what critics want to improve, “indeed, supporting a society based on a viable vision of [personal choice, individual responsibility, and market competition] is the fundamental function of social insurance. But social insurance programs designed to maximize personal choice and promote market competition will simply not deliver adequate social insurance protections.”[15] Privatizing social insurance programs is an oxymoron, as Marmor, Mashaw, and Pakutka note, “Making social insurance programs more ‘market-like’ is seldom a reform that supports family economic security or, in the long run, the market itself.”[16] Without a consensus view of social insurance, misinformed ideologues are mistakenly implementing “fixes” to improve personal choice, individual responsibility, and market competition that will only increase inefficiency in insuring against the inherent risks of a capitalist system.

A lack of a consensus view of social insurance plagued the passage and the ongoing implementation of the U.S.’s Affordable Care Act (ACA), which Marmor describes in his article, “Health Reform 2010: The Missing Philosophical Premises in the Long-Running Health Care Debate.” The U.S. was unlike other countries that simultaneously debated universal health insurance reform policies and the philosophical implications of a proposed reform.[17] Marmor notes Obama’s campaign for health reform repeated traumatic health insurance stories and sparked many partisan commentaries, but lacked a discussion defining fairness and solidarity in this instance.[18] Because the U.S.’s health reform debate lacked a philosophical agreement and the resulting law tinkered with a variety of existing programs, Marmor poses the question, “Is the absence of philosophical consensus an important element in explaining the very mixed reform result that emerged in March of 2010?”[19] The universal mandate central to the ACA continues the U.S.’s adherence to the Bismarck system and its definition of beneficiary: a worker, who contributes, receives program benefits.[20] Marmor, Mashaw, and Pakutka note that historically, Americans defined a “universal” social insurance program as one for “workers” or “contributors.”[21] Furthermore, the ACA continues the U.S.’s tradition of defining medical care as a market good.[22] In contrast, Marmor notes a common pattern of “equal access” in the universal health care programs of Canada, France, Japan, Holland, and Germany, as each country simultaneously debated program options and philosophical implications, and each country based its conclusion on the fact that medical care is a merit good.[23] Writing in Spring 2011, Marmor foreshadowed that the lack of philosophical consensus and reform coherence would weaken the durability of the ACA.[24] If such a debate had taken place, as it had in other democracies, Marmor notes that “while mass publics may not initially grasp the moral implications of reform, over time, experiential knowledge can often shift mass opinion in favor of the moral justifications originally offered by political leaders.”[25] Instead, Obama’s political opponents and their supporters attempted to dismantle the ACA, as there is no philosophical consensus to rally all citizens.

While Canada initially reached an “equal access” consensus regarding public health insurance, outpatient prescription drugs were not initially included in the single-payer model and interest groups have influenced the recent reform. The Canada Health Act is just one example of a Canadian tradition of defining a beneficiary as a resident; this definition stems from the Beveridge system, which is financed by general tax revenues, therefore all taxpayers receive program benefits.[26] Since 1984’s Canada Health Act, recent reforms reflect changes in philosophical consensus, technological capabilities, and fiscal abilities. Carolyn Hughes Tuohy describes these reforms as part of a hybridization phase, where “opportunities for reallocation and reinvestment are seized upon by certain actors within the healthcare system who see the potential to benefit from them….These actors determine the shape of reforms…joining forces with policy makers to influence the design of policy.”[27] As technological change has rapidly improved the capabilities and effectiveness of prescription drugs, pharmaceutical spending has increased; this increased spending is shouldered by individual Canadians, as many previous inpatient drugs have become outpatient prescription drugs.[28] Provinces have individually altered their out-patient prescription drug insurance policy to address this new issue. While there is great cross-provincial variation with regard to cost-sharing, there is a philosophical consensus prioritizing social assistance recipients as beneficiaries of provincial outpatient prescription drug insurance.[29] The province of Quebec has implemented the most substantial change with regard to outpatient prescription drug insurance, Tuohy explains, “Since 1998, all residents are required to have comprehensive insurance for prescription drugs, integrating employer-based coverage into an overall regime of public and private financing and offering a public program with an income-based premium for those without access to employer-based coverage.”[30] While preserving universality, in contrast to the Canada Health Act’s Beveridgean tradition of equal access to all taxpayers, Quebec’s outpatient prescription drug insurance reform incorporated a main tenant of the Bismarck system, as benefits are based on income and program contributions.[31] Tuohy believes private insurers will continue to be allies in reform, as they were in Quebec.[32] In general, the “politics of hybridization” that characterize health insurance reform call for a public/private partnership, as policy makers must identify allies within the private healthcare system and create opportunities for them within the public system.[33] Tuohy accepts the possibility of successful private/public partnerships, to address prescription drug insurance reform, as it is true to the Canadian consensus of social insurance, while utilizing the classic liberal reform style of debate shaped by interest groups.

The risks that led to the creation of North America’s post-war liberal welfare states are not the same risks of the modern economy; as North America’s social insurance programs are reformed, the debate must include a philosophical debate and the input of interest groups. The compromises of the post-war welfare state were based on single-wage earner families; the welfare state has failed to evolve with changes in the distribution of risk to the modern-day economy.[34] Banting and Myles note, across the OECD region, the economy, family structures, and compensation schemes have driven up inequality and “frozen” welfare states are barely able to stabilize income distribution.[35] To make necessary updates to modernize the welfare state’s social insurance programs, debate in North America would benefit from a philosophical consensus and a more comprehensive, informed understanding of how social insurance can complement the capitalist system and preserve private markets.

[1] J. Donald Moon,“The Moral Basis of the Democratic Welfare State,” in Democracy and the Welfare State, ed. Amy Gutmann (Princeton : Princeton University Press, 1988), 28.

[2] Ibid, 32.

[3] Ibid, 42-3.

[4] Ibid, 44.

[5] Ibid, 44 & 52.

[6] Theodore R. Marmor, Jerry L. Mashaw, and John Pakutka, Social Insurance: America’s Neglected Heritage and Contested Future (Los Angeles: CQ Press, 2013), 67 & 217-218.

[7] Ibid, 67.

[8] Ibid, 220.

[9]Keith Banting and John Myles, “Canadian Social Futures: Concluding Reflections,” in Inequality and the Fading of Redistributive Politics, eds. Keith Banting and John Myles (Vancouver: University of British Columbia Press, 2013), 416.

[10] Keith Banting and John Myles,“Introduction: Inequality and the Fading of Redistributive Politics,” in Inequality and the Fading of Redistributive Politics, eds. Keith Banting and John Myles (Vancouver: University of British Columbia Press, 2013), 4.

[11] Banting and Myles,“Canadian Social Futures,”417.

[12] Marmor, Mashaw, and Pakutka, Social Insurance, 67.

[13] Ibid, 218.

[14] Ibid.

[15] Ibid, 217.

[16] Ibid, 241.

[17] Theodore R. Marmor, “Health Reform 2010: The Missing Philosophical Premises in the Long-Running Health Care Debate,” Journal of Health Politics, Policy and Law 36, no. 3 (2011): 567.

[18] Ibid, 567 & 569.

[19] Ibid, 567 & Theodore Marmor and Jonathan Oberlander, “The Patchwork: Health Reform, American Style,” Social Science & Medicine 72, no. 2 (2011): 125.

[20] Katherine Fierlbeck, Health Care in Canada: A Citizen’s Guide to Policy and Politics (Toronto: University of Toronto Press, 2012), 219.

[21] Marmor, Mashaw, and Pakutka, Social Insurance, 241.

[22] Theodore R. Marmor, “Health Reform 2010,” 569.

[23] Ibid.

[24] Ibid, 570.

[25] Ibid.

[26] Fierlbeck, Health Care in Canada, 219.

[27] Carolyn Hughes Tuohy, “Health Care Policy after Universality: Canada in Comparative Perspective,” in Inequality and the Fading of Redistributive Politics, eds. Keith Banting and John Myles (Vancouver: University of British Columbia Press, 2013), 291.

[28] Ibid, 293.

[29] Ibid, 301-2.

[30] Ibid, 302.

[31] Fierlbeck, Health Care in Canada, 219.

[32] Tuohy, 305.

[33] Ibid.

[34] Banting and Myles, “Introduction,”25.

[35] Ibid, 19 & 32.

401 (k)

image

40-what?

I hadn’t finished my first day and human resources (HR) already brought up how it’s going to end. Not already! But eventually, I’ll be retired and living off my 401(k).

(click on the bold-faced vocab words:))

Once I set it up, my 401 (k) will be automatically filled with a cut of my paycheck and invested in the vehicle of my choice.

Porsche? No…investment vehicle options include bondsstocksmutual funds and etfs.

Each company’s plan is different, but perks can include:

  • $ invested before Uncle Sam takes a bite from my paycheck.
  • $ made from the investments does not have to answer to Uncle Sam until withdrawn.
  • Each contribution can have an identical twin, courtesy of my company.

Never thought I would have a desktop clock counting down the seconds till I turn 65.

Hope I look as fabulous as Iris then!

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(Originally published on Amanda Stanhaus’s financial literacy blog: XO, Bettie.)

Risk Rollover

Next time I’ll pay. Instead, I take out even more debt to meet the payment deadline. America is a regular roller.

(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)

Emergence of North America’s Liberal Welfare States

Originally submitted for an independent research project comparing North America’s welfare states with Professor Antonia Maioni at McGill University.

    Industrialization turned what were once rural, intimate communities into urban, anonymous cities. Capitalism’s limitations became apparent to the unemployed, disabled and elderly, who were unable to add value to the capitalist system and were treated accordingly. As suffrage expanded, social policies began to emerge in the North American countries of the U.S. and Canada. These policies upheld North American liberalism and would reflect an integration of social rights into one’s understanding of citizenship.  By 1940, the liberal welfare states of The United States of America and Canada had emerged, as both countries attempted to correct the market limitations of capitalism by institutionalizing welfare.

          Capitalism’s invisible hand lacked a market solution for those who were unemployed, disabled or elderly. Marx would critique that a commodity’s value is a function of the amount of labor used in production.[1] Therefore, if one was unable to participate in the labor force, they were of no value to the capitalist system and were treated as such. Liberal democracies proceeded to institutionalize welfare production, discontinuing the welfare tradition of the private, familial sphere.[2] Capitalism created factory work that was standardized and impersonal, and so too would liberal democracies produce welfare in times of market failure.

        The welfare states that began to emerge as a reaction to industrialization embodied North America’s liberalism. As Banting and Myles explain, while liberal welfare states encourage citizens to rely on the market for economic security, liberal welfare states acknowledge the limitations of the private market, and provide a safety net for the poor.[3]  This development aligned with the power resources model, which describes institutionalized power struggles, “as a struggle between the logic of the market and the logic of politics.”[4] North American liberal welfare states emerged and provided for those unable to participate in the capitalist system’s labor force.

        The U.S.’s welfare state emergence is unique to its history. Following the Civil War, the federal government created a pension system for disabled veterans and dependents of slain soldiers. By the turn of the century, Orloff explains that this social program would morph “into de facto old-age and disability pensions that provided coverage for some one million elderly Americans.”[5] What started out as a necessity for reconstruction, became a political asset and patronage opportunity. Orloff notes that, the U.S.’s “mass electoral democratization preceded state bureaucratization…[therefore] the civil administration was not protected from partisan use, and parties could use government jobs and resources for patronage.”[6] Generally, as countries democratized, Pierson similarly notes, “there is a strong correspondence…between the coming of male universal suffrage and the earliest development of social insurance.”[7] Yet, due to lack of support from Progressive Era politicians, as corruption allegations made patronage systems politically infeasible, the Civil War pension system was not expanded upon and would not be replaced at the federal-level until the 1935 Social Security Act.[8] The Civil War pension system was the first glimpse of a liberal welfare state in the U.S..

           The North American liberal welfare states emerged by addressing income insecurity associated with the capitalist system. Orloff notes the western world’s debate at the time was, “over what the state should do in the face of the increasingly well-publicized problems of income insecurity.”[9] By 1919, thirty-eight states would implement workers’ compensation legislation.[10] According to Guest, “The Ontario Workmen’s Compensation Act of 1914 was Canada’s first piece of social insurance providing compulsory income protection against one of the major risks to the continuity of income in an industrial society– work-related sickness, disability, or death.”[11] Furthermore, enacting a workmen’s compensation law signaled a change in outlook–income security was a right, not an act of charity.[12] Even though this was a monumental reform, this simply was not the most that could be done. Guest notes Roy Lubove’s conclusion  “that compensation laws met the employers’ needs more completely than those of the wage earner, whose real need was for a comprehensive measure to protect him from the risk of earning loss arising from disability or disease regardless of the cause.”[13] Typical of a liberal welfare state policy, the U.S. and Canada tentatively corrected for market failures with workers’ compensation programs.

        Canada successfully enacted the national Old Age Pension Act in 1927. Rice and Prince describe this social assistance legislative milestone, as it provided a means-tested pension to Canadians over 70 years old and the federal government reimbursed 50% of a participating province’s  program expenses.[14] Kudrle and Marmor explain the difference in political timing needed to successfully enact an old age security program in Canada compared to the U.S.:

in Canada, the introduction took place at a time of relative prosperity, while in the United States it came only with the depths of the depression. The Liberals…went on record as favoring national pensions in 1915, and although a means-tested flat grant pension scheme was not actually introduced until 1927 by the Liberal Government of Mackenzie King, the idea had encountered little opposition. In contrast, only Theodore Roosevelt’s 1912 campaign presented social insurance as a national issue in the United States, and until the passing of the Social Security Act in 1935, pensions as a national policy were actively opposed by virtually all major politicians and trade union leaders.[15]

While the need and the political philosophy of a liberal welfare state was present in both countries, the nuances of ideology, party system and special interest groups resulted in Canada instituting the first national old age security program.

        As women gained political influence in society, which would lead to the expansion of suffrage, the welfare state expanded to include mothers’ pensions. Provinces began to expand suffrage to women in the early 20th century, and Guest notes, “it is hardly a coincidence that provincial schemes of mothers’ pensions … should follow in such short order the granting of the franchise to women.”[16] Similarly, by 1919, thirty-nine states had instituted mothers’ pensions, reflecting the steady expansion of  suffrage for women state-by-state; Berkowitz describes this justification: “mothers’ pensions supplied widows with money to keep the family going and functioned as an investment in ‘home life,’ ‘the highest and finest product of civilization,’”[17] Yet again, suffrage was correlated with the expansion of  North American liberal welfare states.

          The Great Depression exposed the extreme flaws of capitalism, and its legacy would further develop North American welfare states. Pierson explains the motivation to institutionalize welfare,  because extreme events of the Great Depression showed:

it was impossible to sustain actuarially sound social insurance under circumstances of profound economic recession… demand for social expenditure (especially unemployment compensation) was inversely related to the capacity of the economy to fund it… to respond to this problem by cutting social expenditure would simply intensify rather than alleviate these economic problems.[18]

Traditionally, social policy was a provincial responsibility, but the Great Depression was an extreme case and the federal government provided temporary unemployment relief.[19] The Great Depression discredited America’s traditional approach of welfare capitalism, yet President Roosevelt proceeded with caution.[20] Orloff elaborates on Roosevelt’s approach,

planning for social insurance initiatives was undertaken immediately, but no legislation was proposed by the administration. In contrast, the president introduced federal emergency relief legislation almost immediately upon taking office, thus responding to the plight of the unemployed–and to the not inconsiderable protests of [the overwhelmed] state and local welfare officials.[21]

 Berkowitz notes Roosevelt’s nuanced approach that would result in the creation of the Works Progress Administration: “if it was necessary for the government to provide relief, Roosevelt believed it should take the form of jobs, rather than straight handouts.”[22] The Great Depression drastically affected both countries; the reaction of each country reflected their own tradition of social policy development.[23] Kudrle and Marmor note Christopher Leman’s generalization: “Canada proceeds in a steady deliberate fashion…whereas the United States tends to move only with a ‘big bang.’”[24]  While following their own traditions, subsequent North American emergency relief embodied the principles of a liberal welfare state.

          Once emergency relief was implemented, Franklin Delano Roosevelt’s administration sought to implement long-term social insurance policies for both the elderly, as well as the unemployed; as Kudrle and Marmor would note, in “the depths of the depression.”[25] FDR and his administration’s members were products of the Progressive movement, and that experience would influence the good government and fiscal responsibility aspects of the social insurance programs they would create.[26] Berkowitz elaborates:

Roosevelt’s advisors regarded old-age insurance, their social insurance proposal, as a dignified alternative to the state pensions, such as the one in Ohio, that nonetheless would not bankrupt the government. Their plan would take the form of a guaranteed contract–an insurance policy–into which workers and their employers made regular contributions and from which they received regular monthly retirement benefits from the federal government beginning at age 65.[27]

Orloff explains the final product, “the U.S. social insurance program for the aged received no financial input from federal coffers, a logical outcome of Roosevelt’s concern to preserve a sharp distinction between social assistance and social insurance programs.”[28] In addition to social insurance for the elderly, the law also created an unemployment insurance system that was state operated and federally coordinated.[29] The Social Security Act of 1935 was the crowning achievement of FDR’s New Deal; America’s liberal welfare state had emerged, as both the unemployed and elderly had insurance for times of market failure.

          During the Great Depression, Canada also sought to implement a long-term program to provide income security to workers during times of a market failure’s unemployment. Prime Minister Bennett’s Employment and Social Insurance Act of 1935 was primarily a system of unemployment insurance copied from the British legislation of 1935.[30] Specifically, Guest explains, “the act required compulsory coverage of all employees over the age of sixteen and earning less than $2,000 per year…A minimum contribution period of forty weeks within a two-year period was required before the worker could claim thirteen weeks of benefit.”[31] This legislative milestone reflected the changing mindset of the time, as unemployment became a national, economic problem, not a local, personal problem.[32] Yet, the Supreme Court of Canada and the Privy Council of Great Britain declared this act unconstitutional, finding that the federal government had intruded on what was a provincial responsibility.[33] Canada recognized the necessity for a federal role in social insurance, so in 1940, Section 91 of the British North America Act was amended; Guest explains that now “the federal government [had] exclusive jurisdiction over legislation in the field of unemployment insurance, the first modification of the original distribution of social service responsibilities.”[34] Following this amendment, the liberal government of Prime Minister Mackenzie King enacted the Unemployment Insurance Act of 1940, which was very similar to both Bennett’s and British legislation, except that “benefits and contributions were wage-related, as opposed to the flat-rate system.”[35] The Great Depression of the 1930s exposed the need for federal involvement in social policy; Canada’s “steady deliberate fashion” coincidentally instituted yet another social policy during “a time of relative prosperity,” namely 1940.[36] Once the British North America Act was amended to reflect the modern federal role in social policy, unemployment insurance became a reality for Canadians.

          The North American countries of the U.S. and Canada revolutionized and institutionalized welfare production, as their countries industrialized and market limitations of capitalism became apparent. The emergence of North America’s  welfare states signaled a collective change in conviction; T.H. Marshall explains that in the twentieth century  social rights were incorporated into the status of citizenship.[37] FDR’s “Four Freedoms”  speech, which would prepare Americans for the notion of entering World War II, echoed this understanding of social rights, “freedom means the supremacy of human rights everywhere. Our support goes to those who struggle to gain those rights or keep them. Our strength is our unity of purpose. To that high concept there can be no end save victory.”[38] The U.S. and Canada created their own unique liberal welfare states to correct the market limitations of capitalism; their advanced view of social rights would contribute to a justification to enter–and positively impact the outcome of–World War II.

[1] Christopher Pierson, Beyond the Welfare State? : The New Political Economy of Welfare (Cambridge: Polity, 2006),12.

[2] Dennis Guest, The Emergence of Social Security in Canada ( Vancouver: University of British Columbia Press, 1980), 2.

[3]Keith Banting and  John Myles, “Introduction: Inequality and the Fading of Redistributive Politics,” in  Inequality and the Fading of Redistributive Politics, eds. Keith Banting and  John Myles (Vancouver: University of British Columbia Press, 2013), 4.

[4] Pierson,30-1.

[5] Ann Orloff, “The Political Origins of America’s Belated Welfare State,” in The Politics of Social Policy in the United States, eds. Margaret Weir, Ann Orloff and Theda Skocpol  (Princeton: Princeton University Press, 1988), 38.

[6] Ibid, 44.

[7]Pierson, 112.

[8] Orloff, 39 & 59.

[9] Ibid,52.

[10] Ibid, 53.

[11] Guest, 39.

[12] Ibid.

[13] Ibid, 46.

[14] James J.Rice and Michael J. Prince, Changing Politics of Canadian Social Policy (Toronto; Buffalo: University of Toronto Press, 2000), 52.

[15] Robert Kudrle and Theodore Marmor, “The Development of Welfare States in North America,” in The Development of Welfare States in Europe and America, eds. Peter Flora and Arnold J. Heidenheimer (New Brunswick: Transaction Books, 1981), 92.

[16] Guest, 51.

[17] Edward D. Berkowitz, America’s Welfare State: From Roosevelt to Reagan (Baltimore: Johns Hopkins University Press, 1991), 96.

[18] Pierson, 121.

[19] Guest, 87.

[20] Orloff, 65.

[21] Ibid, 69.

[22] Berkowitz, 15.

[23] Kudrle and Marmor, 91.

[24]Ibid.

[25] Ibid, 92.

[26] Orloff, 70.

[27] Berkowitz, 20.

[28] Orloff, 73.

[29] Kudrle and Marmor, 95.

[30] Guest, 88.

[31] Ibid.

[32] Ibid, 89.

[33] Ibid, 106.

[34] Ibid.

[35] Ibid.

[36] Kudrle and Marmor, 91 & 92.

[37] T. H. Marshall, Class, Citizenship, and Social Development (Garden City: Doubleday,1964), 96.

[38] Franklin D. Roosevelt, “Four Freedoms,” Franklin D. Roosevelt Presidential Library and Museum, January 6, 1941, http://www.fdrlibrary.marist.edu/pdfs/fftext.pdf.

Bond

Bonds are not redeemable to meet James Bond. Bummer…

(click on the bold-faced vocab words:))

Instead, Uncle Sam is starving. He needs me to spot him some $$. A bond is a more official version of spotting $$.

I’ll get my $$ back when the bond matures.

A bond’s coming of age story includes semi-annual coupon payments until Uncle Sam returns my $$.

Companies also sell bonds. Corporate bonds are thought to be riskier than government bonds. A company cannot directly control its revenue and cash flow like a government can (i.e. tax policy and printing $$).

If the American Government is unable to pay me back, most likely we will have bigger problems on our hands (à la alien invasion). A space helmet could be a fun new accessory though!

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(Originally published on Amanda Stanhaus’s financial literacy blog: XO, Bettie.)

Treasury Bill

T-bill. Backed by the full faith and credit of The US government. These bonds mature in less than a year and pay no interest. The bondholder instead makes money through the bond’s appreciation.

(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)