It looks obvious

“Things should be made as simple as possible, but no simpler.” — Albert Einstein

Not so different

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Pretty often I’m hearing praises of the European welfare system compared to the American capitalistic system. While I’m not sure that the European system doing better than the American I want to point to the fact that the comparison is between two welfare systems and not between welfare state and free market state:

The table shows the rise of the American welfare state. In 1956, defense dominated the budget; the Cold War buildup was in full swing. The welfare state, which is what "payments to individuals" signifies, was modest. Now everything is reversed. Despite the war in Iraq, defense spending is only a fifth of the budget; so-called entitlement payments to individuals are almost 60 percent — and rising. In fiscal 2006, the federal government spent almost $2.7 trillion. Social Security ($544 billion), Medicare ($374 billion) and Medicaid ($181 billion) dominated. There was $199 billion more for payments to the poor, including the earned-income tax credit and food stamps.

The main different is probably that the European proud at their welfare state while in the US we still try to hide it:

It might help if Americans called welfare programs — current benefits for select populations, paid for by current taxes — by their proper name, rather than by the soothing (and misleading) labels of "entitlements" and "social insurance." That way, we might ask ourselves who deserves welfare and why.

However the observation about the entitlement is probably universal

We could consider all of federal spending and not just small bits of it. But most Americans don’t want to admit that they are current or prospective welfare recipients. They prefer to think that they automatically deserve whatever they’ve been promised simply because the promises were made. Americans do not want to pose the basic questions, and their political leaders mirror that reluctance. This makes the welfare state immovable and the budget situation intractable.

 

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Written by Rogel

February 14th, 2007 at 8:59 am

Posted in The Free Market

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Viewing 3 Comments

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    You have definitely pinpointed one of the more important problems of American politics and policy. It's not that Americans don't spent money on welfare, it's that they do so without due public discourse and thus with poor results. Examples are to be found in abundance, but none (I think) compares to that of your health system. Undoubtedly the most expensive health system around, with almost half of the spending coming from federal sources (yup…). And yet, Americans don't receive better health care that countries spending just a little over half that amount (standardized by GDP measures to account for differences in population and economies, of course). Actually, most Americans receive much less. Instead of turning a blind eye to welfare, Americans might benefit tremendously by looking it in the face. Despite the evil reputation welfare politics has been given by some economists (let's leave the politicians out for a sec), it (welfare) simply has to do with the sort of society one wants to live in. Is that something not worth debate?
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    It is definitely worth the debate. But when comparing we should know that we compare between two different versions of welfare state systems rather than free market society compared to a welfare.
    We might find that some of the faults assigned to Capitalism are actually problems inherent to its rival approaches :)
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    We might. But, to me, that just sounds like good old "blame it on someone else". Surely welfare states have their faults. But capitalism is no white angel either. At the end of the day, it's a matter of choice. I know mine, and I guess you know yours.

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