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The Townsend Plan Behind Social Security

Before there was ‘Social Security’ there was the Townsend Plan. Mr. Francis Townsend (1867 – 1960) was a doctor.

His reform plan envisioned much more than just healthcare benefits, but a ‘permanent pension’ for the poor.

From Wikipedia:

The Townsend Plan

The Townsend Plan called for a guaranteed monthly pension of $200 [which is $3,334.48 in 2010 dollars] to every retired citizen age 60 or older, to be paid for by a form of a national sales tax of 2% on all business transactions… with the stipulation that each pensioner would be required to spend the money within 30 days.

That is, recipients were to be forbidden from saving, because that might eventually lift them out of poverty. Luckily, we have found other ways to solve this problem.

The main argument against the plan, however, was that the taxes would not be enough to pay for the high pensions, which would account for almost half the national income. Townsend and Clements, the co-founder of the organization and its motive force, quickly amended the proposal to pay out only as much as the tax would bring in.

Even these dreamers were more fiscally responsible than our current crop of Solons.

The Townsend Plan contested old-age policy in a serious way for more than a decade. This led up to the Social Security Act (SSA) presented by Franklin D. Roosevelt in the New Deal.

Townsend and Clements employed the techniques of real estate salesmanship to gain support for the Townsend Plan.

Saul Alinsky having not yet written his guidebooks.

Soon there were organizers in almost every state seeking to create Townsend Plan programs.

Which sounds oddly familiar.

In 1935, partly in response to the continued growth of the Townsend Plan, President Franklin D. Roosevelt proposed his own old-age policy, which was less generous than Townsend and Clement’s proposal. The president’s policy included a program for poor older people with matching payments from the federal government, known as Old Age Assistance, and a national old-age annuity program that later was called by all Social Security. The president’s programs were included in the Social Security Act, which passed in August 1935…

Townsend [supporters] could plausibly claim that the benefits were far less than what the American public wanted. The average Old Age Assistance benefit was about $20 per month as late as 1939, and the program known as Social Security was not due to take effect until 1942, despite the fact that opinion polls indicated that the American public thought that $40 per month was fair for the elderly…

The Townsend Plan helped to induce amendments to the Social Security Act in 1939. These amendments greatly upgraded old-age benefits for both programs.

Along with other pension organizations that promoted state-level Old Age Assistance programs, the Townsend Plan indirectly spurred the augmentation of Social Security in 1950, when it finally became a more generous program than Old Age Assistance. The Townsend Plan continued to exist in some form until the early 1980s, but had fallen into political insignificance during the 1950s.

Somehow it doesn’t seem to be so insignificant anymore.

It is only a question of time before someone decides we should just cut to the chase and do income redistribution right.

This article was posted by Steve on Wednesday, March 24th, 2010. Comments are currently closed.

9 Responses to “The Townsend Plan Behind Social Security”

  1. U NO HOO says:

    “Before Astro-Turf” organizers?

    Yuk, yuk.

  2. GetBackJack says:


    If you haven’t read this, you don’t know how far back the Townsend Plan goes in its origins. The drive to control, control, control …. while the Controllers party on … is as old as the Republic.

  3. confucius says:

    Dr. Francis Everitt Townsend was more than just a doctor. He was a failed doctor and community organizer.

    On closing his short-lived practice, Dr. Townsend went to work for the government as an assistant in Long Beach’s health department. On losing that job, he went into politics.

    In 1933, Dr. Townsend came up with a plan wherein the federal government would give senior citizens a defined monthly pension check. He called it the Old Age Revolving Pension Plan and further proposed it be funded by a national “transaction tax” which was to have been a collection of taxes serially added at each production level during the creation of a given consumer product.

    Dr. Townsend believed these pension checks would stimulate the economy, create jobs, and ultimately end poverty, crime and the Great Depression. He called this effect the “velocity of money” and the check recipients, “distributor custodians.”

    Dr. Townsend promoted his ideas with the help of real-estate broker named Robert E. Clements. The two began organizing groups called “Townsend Clubs” that canvassed communities for monies and membership. They even started a newspaper called “The Townsend Weekly.”

    Dr. Townsend’s ideas proved popular. In short time, he and his colleagues amassed enough money and followers that they became known as “Townsendites.” They were noticed by the press and politicians.

    Eventually, the Townsendites sent approximately 20 million signatures to Congress petitioning for the Old Age Revolving Pension Plan.

    Townsend’s Pension Plan was the forebear of the Social Security Act of 1935. His “transaction tax” is similar, if not identical, to Europe’s value added tax.

    At the peak of his popularity, Dr. Townsend said he “had been chosen by God to accomplish this mission.” Dr. Townsend was even compared to Abraham Lincoln and Jesus.

    Dr. Townsend’s story doesn’t end here.

    Dr. Townsend remained discontented even after the passage of Social Security. He felt it, and the rest of the New Deal, didn’t go far enough. He joined forces with Gerald L. Smith (leader of the Share Our Wealth movement) and Father Charles Coughlin (founder of the National Union for Social Justice) to form the Union Party. Their candidate lost in the 1936 presidential elections which was the beginning of the end of the Union Party and its founders.

    If this doesn’t sound familiar, it should. The Great Recession is the Great Depression. Barack Obama is Dr. Townsend. Tony Rezko, David Axelrod and Valerie Jarrett are Robert E. Clements. Obama’s community organizers are the Townsendites. ObamaCare is the Old Age Revolving Pension Plan. The value added tax is the “transaction tax.”


  4. MinnesotaRush says:

    A pig in the mud is a dirty pig whatever ya’ call it!

  5. jobeth says:

    What to do with all the oldies is a real problem for the progressive left.

    Oldies sop up valuable health care dollars and are now claiming SS dollars each month. (never mind they’ve paid in by mandate ALL their working lives.)

    Some of them actually still take up jobs that the young want. And houses that the young want. And they are no longer taxable in the high rates they paid in when they were younger, thus they’ve used up all their value to their country. (No matter that many still bear wounds from fighting for their country…that was then…this is now….)

    Why don’t we just cut to through all this stuff. Stop all this step by step incrementalism.

    If we just put all the oldies on strong pain meds…because they are all feeling some sort of pain. Wait till they are asleep and humanely euthanize them.

    Problem solved. Before they leave though they should be made to prepay their funeral.

    Helps the employment situation.
    Helps the medical situation.
    No more pesky parents to take care of.
    Gets rid of all those who were actually educated enough to know what’s in the constitution. (And who know that “Good and Welfare” is not in it”…Conyers)

    See how easy it all is?

    Then we can extend this plan to all people who might be mentally disabled.
    Or physically disabled. They just use up money and space.

    Or those who think wrong politically, because they must be crazy, thus unfit to live. Besides they are always complaining about something we are trying to do to for them.

    What a wonderful world we would have then.

    Only the narcissistic, mean, murderous, selfish, self centered, egotistic, lying, cheating, thugs will survive. You know…kind of like Hitlers view of the world. That worked out well, didn’t it.

    This would be America’s future if these progressives get all their “change”.

    I’m one who likes to go looking for silver linings in dark clouds. The silver lining for this dark cloud is it has awakened a lot of sleeping spoiled, uneducated Americans.

    Perhaps Americans will be more appreciative of our hard fought for freedoms.

    Perhaps we won’t be so gullible the next time some silver tongue commie comes around. I hope so. At least for a generation…or half a generation. The youngest still need to learn.

    I have a lib friend who I would have normally seen today. She told me not long ago that this sort of thing…(rationing of health care)…”couldn’t happen” in America.

    I didn’t see her today. She said she had something to do today and wouldn’t be able to come in . I’m wondering if it had anything to do with her not wanting to face facts after this week’s new law. Hard to NOT see where this health care law will lead. Not to mention where all the other progressive plans like the subject of this thread and others would lead.

    Ummm. Just might.

    • Rusty Shackleford says:

      I’ve heard it said that when the Greatest Generation is but a memory, the nightmare will begin.

    • proreason says:

      You’re right about this Jobeth.

      Anybody older than them is just a resource consumer. And in their world, resources are a zero sum game. If you use it, they can’t. They have no concept of growing the pie. They reject the notion. That’s why they hate Reagenomics. It’s the same thing to them as being pro-life. Not a part of their religion.

      So you gotta go.

      You’re a threat to them.

      And anybody who thinks that is extreme, go read Robert Reich’s comments about it.

      Death panels. For sure.

      And don’t forget all of the kind words and love the Moron has expressed for his grandparents.


    • wardmama4 says:

      Jobeth – you are on the right track – but haven’t gone far enough –
      Never forget –

      Soylent Green Is PEOPLE!!!!

      It’s Coming.

  6. sheehanjihad says:

    I wish it weren’t true…all of this. If we dont do something….our status as grandparents will be a farewell CD that the Government sends our grand kids after we have our ubiquitous “battle with an unknown illness” at the Government Center for the Aged.

    My ass! Again, for the umpteenth time. I aint goin!

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