As Americans we pride ourselves on self reliance and pulling ourselves up by the bootstraps. Those of us of a certain age will recall the pride our grandparents had about scraping through hard times without going on “the dole.” These days, we use the more genteel—but still distasteful—term welfare. We don’t approve of a welfare state. We’re Americans, after all—not Europeans.
But while we may prefer the term “social safety net,” “dream on,” says Robert J. Samuelson in Investor’s Business Daily. We’re very much a welfare state:
Call it a massive case of national self-deception. Indeed, judged by how much countries devote of their national income to social spending, we have the world's second-largest welfare state — just behind France.
This is not just conjecture. The Organization for Economic Cooperation and Development (OECD) — a group of wealthy nations — has recently published new figures on government social spending.
…the U.S. is hardly a leader. It ranks 23rd in the world, with social spending of roughly 19% of GDP. This is slightly below the OECD average of 22%. France is the champ at nearly 32%. (The data are generally the latest available.)
But wait. 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 U.S. 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 U.S. vaults into second position with roughly 30% 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. …
We pretend (or some of us do) that our Social Security taxes have been "saved" to pay retirees, 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, we might have an easier time debating these difficult and unpopular choices.
A good first step is the ability to identify those with genuine need, and then providing resources to them directly instead of through massive, wasteful bureaucracies. On both counts, private solutions are better than government programs.
First, smaller communities are better able to identify—and verify—people in need. Next, local civic and faith communities have better motives to give people a leg up—not handout after handout—because local private organizations are not interested in forming permanent political constituencies grounded in dependency. On the flip side, people who receive help are less likely to develop an entitlement mentality because of the personal interactions and bonds they form with volunteers and those who help them directly.
Especially at this time of year, people are mindful of the many blessings they have and try to help out the less fortunate by donating food, their time, or their resources. For all the government programs, so many Americans still need our individual help. Believing there’s some sort of government program to “fix” the problem can lead us into believing that our help (beyond paying taxes) isn’t necessary.
It is—throughout the year, not just during the holidays.
The best way to roll back a nameless, faceless, welfare state is to get involved in our local communities. No matter how seemingly small our contribution is, helping one person makes a world of difference.
Rather than rely on massive government programs that are typically fraught with waste, less of our hard-earned money should be going to government. That way, we have more resources and time to devote to helping those in our own communities—without making people in need a “problem” for an impersonal bureaucracy or political agenda to solve.