Why is it that the Right in America is so afraid of the Welfare State. Why is it that Europe, the favored travel destination of most every member of our elite some 100 years ago, is now held up as the place where we most of all don’t want to go, the kind of place where we certainly don’t want to live.
The answer most often given is that Europe has become the place where fewer and fewer people work, and instead the place where more and more people depend on cradle to grave government subsidies.
How is it that following the longest world-wide battle in history, lasting some 200 years or more (and for some not yet over), when one side, capitalism, has clearly won out over the other side, socialism, how is it that socialism’s replacement, welfare, has been able to jump into the battle and become today the new threat to the free market capitalists, the clear winners of that longest battle?
Is it just a case of cutting off one head and seeing another one spring up in its place?
No. The answer is that capitalism, while becoming the most efficient wealth creator ever, and while relegating its rival socialism to the historical dust heap, has done little on its own initiative to distribute an adequate portion of its enormous wealth to those who somehow have not much profited from the highly profitable world-wide exchange of goods and services.
Capitalism while enormously successful has failed too many people. That’s the reason for welfare.
Because of this failure (both in Europe and America) government funded social safety nets have come into being. It’s because capitalism has permitted an ever growing number of failed individual human lives, people left behind as it were in the wake of those powerful and inhumane market forces that refashion to their own not human ends the land and water surfaces of the earth.
Entitlements come into play and provide a much needed safety net. Entitlements are the results of the efforts of some, mostly on the political Left, to cushion the lives of those millions in this country (say those without health insurance), and those hundreds of millions world-wide (say those without jobs). For most of these millions the profits obtained by ubiquitous market exchanges have not much trickled down to them.
Social Security, then one generation later Medicare and Medicaid, along with various other anti-poverty and community social service programs, were enacted into Law by the Democratic controlled Congresses to provide social safety nets adequate to the needs of the growing numbers of people not able to provide for themselves and their families. This is what we mean by welfare. It’s not bad, and it’s here to stay.
You might say if you want that we have been following, since the end of the Second World War, Europe’s lead, becoming a state, like the countries of Europe, where welfare payments consume a larger and larger portion of our federal budget. But we had no real choice. Our people’s need was there and we would have done this on our own, with or without Europe’s lead.
The problem is not welfare, or the welfare state. The problem is whether we are wealthy enough to pay for the programs that we have already enacted, let alone the health care reform act that Congress is about to pass. The problem is particularly acute because of growing entitlement spending during the past 40 years or so.
“Since 1970, the historical ratio between defense spending and entitlement spending on Medicare, Medicaid, and Social Security has flipped. In 1970, total defense spending was 8.1 percent of our economy or Gross Domestic Product (GDP) — more than twice the 3.8 percent of GDP spent on the big three entitlement programs.
“Today, the core defense program has fallen to 3.9 percent of GDP, while entitlement spending has more than doubled to 9.6 percent of GDP. By 2030, the big three entitlements will absorb roughly 81 percent of all federal revenue if taxes are rightly held at historical levels.”
To read more about this seemingly disastrous state of affairs go HERE and HERE and HERE.
Is the Right, for whom entitlements are a nemesis, right? Need we be afraid that it will happen here as in Europe, that “fewer and fewer people work, and more and more depend on cradle to grave government subsidies?”
I don’t think so. But the federal government, while not turning away from its commitment to welfare and an adequate safety net, should direct a much higher proportion of its efforts to job creation, that which would mean in many cases just getting out of the way of the entrepreneurs, those who make welfare or the redistribution of a country’s wealth, even possible.
At one time agriculture consumed a huge portion of the country’s wealth, a huge portion of the government’s outlays, some 40% of GDP. This changed only when agriculture become more efficient.
The only answer to the welfare state’s not consuming the lion’s share of the country’s wealth is to grow the country’s wealth. The threat to us is not what’s happening in Europe. It’s what’s not happening in Europe. The pie, the wealth is not growing, at least not growing enough to insure investment in future growth.
So as in the past the Federal government has to get out of the way of the people who are able to make the pie bigger. Only in this way, when there is more there to start with, higher earnings and higher federal revenues, will workers get to keep a larger portion of those earnings and will those who need help, the poor, the old, the unemployed, the sick and the handicapped, and all the others, get that help, that which might even mean, in the best of possible worlds, a reentry into the work force.