Public Benefits and bankruptcy

Posted by Wesley Scott on September 28, 2022 at 7:30 AM
Wesley Scott

shutterstock_1095575156Welcome back to our series of blog posts on the history and philosophy of the economy, bankruptcy, and debt – today we discuss public benefits, which are today are generally couched as welfare. 

Public benefits are not new. In the Roman Empire, there were the idiomatic “bread and circus” offerings, ostensibly to quell public discord. Regardless of the rationale, “grain doles” were available to those who could not afford food. Many subsequent welfare programs were not public; they were offered by religious organizations, but it is worth noting that throughout the Middle Ages religious organizations occupied an even more dominant role in society, perhaps similar to local governments. 

Fast forward to a more relevant discussion of welfare in America – early welfare programs focused on the wellbeing of children, especially the parent-less, providing housing and education. The rationale was, in the absence of parents, the state was responsible for the wellbeing of the young people. After the civil war, some benefits were extended to veterans and occasionally widows, offering grants of land and pensions. The poor also had options for help, but they came with strings attached; for example, men could elect to move into a workhouse where they received modest accommodation, food, and sometimes some healthcare in exchange for miscellaneous, unbearably menial work. The great depression stretched the existing programs to their breaking point – leading to the Social Security Act of 1937


We will continue our discussion of public benefits in the 20th century in the next post, including programs like food stamps, public housing etc. For now, suffice it to say that many protections exist for public benefits and they are generally safe in a bankruptcy – we will dig in the details next post. If you are interested in the history and philosophy of the economy, bankruptcy, and debt, stay tuned for my blog posts. And, if you are thinking about filing, reach out to us at


Topics: who pays for bankruptcies, benefits of filing bankruptcy,, bankruptcy and insolvency act

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