Socialism (programs/more taxes/more government/welfare state) DOES NOT and HAS NOT every worked Just look around the world. It leads to MORE misery. This is the most obvious obserrvation possible. If you're miserable now, you will certainly be more miserable with more govt. STAND UP AND BE AN ADULT. Try hard for once. It's so incredibly easy to not be an idiot in this country.
SPONSORED BY:
- 1
- 2
Our Sinking Welfare State
Email To A Friend
Please fill in the following information and we'll email this link.
SPONSORED BY
Pressures on private and public welfare won't abate. The economic conditions that encouraged corporate welfare have long since vanished. In 1955, GM, Ford and Chrysler controlled 95 percent of U.S. light-vehicle sales. With market dominance and technological leadership, the "Big Three" assumed they could pass along the costs of job guarantees, high wages and benefits to consumers.
Eager to defuse the class warfare of the 1930s—and to avoid unionization—many U.S. companies imitated the model. They, too, believed that competition would be limited and technological change could be controlled. These conceits are gone (in 2008, the Big Three's market share was 48 percent—and dropping). Now companies are hypersensitive to competitive and economic threats. A survey of 141 major companies by the consulting firm Watson Wyatt found that 72 percent have recently cut jobs, 21 percent reduced salaries and 22 percent curtailed 401(k) contributions.
In theory, expanding public welfare could offset eroding private welfare. President Obama's health-care proposal reflects that logic. The trouble is that the public sector also faces enormous cost pressures, driven by an aging population and rising health costs. The Congressional Budget Office projects the federal debt to double as a share of the economy (gross domestic product) to about 80 percent of GDP by 2019.
Any sober examination of figures like these suggests that the system has promised more than it can realistically deliver. We are borrowing not to finance investment in the future but to pay for today's welfare—present consumption. Sooner or later, the huge debt will weaken the economy. Nor would paying for all promised benefits with higher taxes be desirable. Big increases in either debt or taxes risk depressing economic growth, making it harder yet to pay promised benefits.
The U.S. welfare state is inevitably weakening; insecurity is rising. The sensible thing would be to decide which forms of public welfare are needed to protect the vulnerable and to begin paring others. Our inaction poses another dreary parallel with GM. It was obvious a quarter century ago that GM the auto company could not support GM the welfare state. But the union wouldn't surrender benefits, and the company acquiesced. Inertia prevailed, and the reckoning came. The same cycle, repeated on a national scale with sums many multiples higher, would be correspondingly more fearsome.
Samuelson is The author of The Great Inflation and Its Aftermath.
© 2009
- 1
- 2
Discuss