Who's Afraid Of The Big, Bad Welfare State? Hint: We Should Be A Little Less Smug...
...About what a pioneering, self-reliant nation we are.
@AnneApplebaum pointed out in a tweet that the US's welfare state is NOT smaller than Europe's, linking to this WaPo op-ed by Robert Samuelson. It centers on new figures published in a report on government social spending by the The Organization for Economic Cooperation and Development (OECD) -- a group of wealthy nations. Samuelson writes:
Call it a massive case of national self-deception. Indeed, judged by how much of their national income countries devote to social spending, we have the world's second-largest welfare state -- just behind France....Direct government spending isn't the only way that societies provide social services. They also channel payments through private companies, encouraged, regulated and subsidized by government. This is what the United States does, notably with employer-provided health insurance (which is subsidized by government by not counting employer contributions as taxable income) and tax-favored retirement savings accounts.
When these are added to government's direct payments, rankings shift. France remains at the top, but the United States vaults into second position with roughly 30 percent of its GDP spent on social services, including health care. We have a hybrid welfare state, partly run by the government and partly outsourced to private markets.
...The main message that Americans can take from this report is that we need a higher level of candor. The very complexity of our hybrid system seems intended to disguise the reality that we have a welfare state. We have created a new vocabulary to validate our denial. From our "safety net," we distribute "entitlements" that are not "handouts" and don't qualify as "welfare" payments. We pretend (or some of us do) that our Social Security taxes have been "saved" to provide for our retiree payments, when today's Social Security checks are mainly financed by the payroll taxes of today's workers, just as yesterday's checks were financed by the taxes of yesterday's workers.
If we were more honest about these matters, we might have an easier time debating what are admittedly difficult and unpopular choices. Who deserves benefits, how much and why? What are the consequences for taxpayers and the larger society? Does our hybrid mix of public and private power make sense? These are insistent issues that won't vanish even though we pretend they don't exist.
"notably with employer-provided health insurance (which is subsidized by government by not counting employer contributions as taxable income) and tax-favored retirement savings accounts."
This is a socialist's definition of a subsidy.... Money that companies, and individuals earn, and benefits provided at company and individual expense, that the government in their magnanimity.....doesn't tax (or taxes at a lower rate)
This does not meet the definition of a subsidy to anyone other than a progressive.
Isab at November 30, 2014 7:04 AM
I'm with Isab on this. There is a world of difference between not taxing something and giving someone money.
When you accept the not taxing argument as subsidy all governments provide the exact same level of support. After all, they could have taxed your income at 100%. Letting you keep any money is the same as this tax break subsidy.
Ben at November 30, 2014 4:36 PM
What we really should look at is not the portion that is returned (whether you term it a subsidy or not), but the portion that the goverment required you to spend in the first place. The point is that if the government didn't encourage / lean on you to spend the money that way, via the carrot and stick of taxes and deductions, you might have chosen to spend the money some other way. And why does the government want you (and your employer) to spend that money that way? Because there are a lot of cross-subsidies built in the system. (And Obamacare is making that worse.) It goes back to the point about the system being so obscure that it's hard to tell how much money is actually being spend, and that the socialists like it that way.
Cousin Dave at December 1, 2014 8:40 AM
> Applebaum pointed out in a tweet
> that the US's welfare state is
> NOT smaller than Europe's
When Europe starts handling their own defense instead of letting us pay for it, Applebaum's argument will be more convincing.
And there are many matters of modernity which Europe has failed to address. This is a short and wonderful piece from Christopher Caldwell.
I've clumsily taken ideas from him many times, perhaps presenting them in comments here as if they were mine. But I've never had an interesting thought of my own, ever. Caldwell has written many good things, including a book with Hitchens. If you see his name somewhere, you should read the words underneath it.
Crid [CridComment at Gmail] at December 1, 2014 12:17 PM
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