What Have We Learned?

There are a veritable ton of social welfare programs in the United States.  Depending on how far you feel like breaking them down determines how many programs there are. Just under housing there are 12 distinct programs, another 12 are under education and food assistance.  The point is, the system can get a bit hairy the deeper you delve into them.  They provide a plethora of services with the universal goal of helping those who need to be helped the most.

Social welfare programs have existed since the Roman Emperor Augustus began distributing money to citizens who were too poor to buy food.  In the United States welfare programs have existed since we were a collection of colonies ruled over by the British.  They exploded during Franklin Roosevelt’s presidency to help the nation recover from the great depression and again under Lyndon Johnson at the start of his war on poverty.  The programs have been changed and changed again throughout that time.

These programs have become an issue of great tension in the United States.  Not because people do not think that the poor or sick or elderly are in not in need of help.  The problem comes from a fundamental disagreement in how much help should be given; who should receive the help; how that aid is delivered, and, to many the biggest question, how much the government is involved.

We have spent the last several weeks looking at how both sides of the political spectrum in the United States looks at this monumentally large, and important, question.  There are plenty of theories and plans, and both sides insist that their ideas are the only way to move towards fixing the underlying problems.

If you look back there appears to be a clear trend forming.  One that shouldn’t be too surprising if you look at it generally, but if you look at the details of the plans and the speed at which it the opinions and policies are changing it can be frightening.

The conservative movement is continually for less government involvement in social welfare.  Most simply want less intervention and to allow the free market and private citizens to determine how much and when they give to those causes.  There are some who call for the abolition of some of the programs and restrictive regulations put on them as well, but those do not appear to be the mainstream opinion.

The liberal movement in the United States, as expected, is all about expanding the programs and covering more people with more services.  They feel that this would allow the people who truly need help to get on, or back on their feet, and start moving forward to help the next group who need it.

It is clear that these programs are sorely needed.  The nation obviously has to have some form of safety net.  Without the expansion and addition of welfare programs the great depression would have continued far longer than it did.  The real question we have to ask ourselves as a country is how much are we willing to give of ourselves to help others, and how do we make sure that we, as the United States of America, continue to fight for what is right for the nation as a whole and for everyone who lives in it.

Social Welfare Around the World

This week I am painting with much broader strokes.  While I have focused a lot on the programs in the United States, I am turning to look at the outside world and see how they handle the age old question of how much should the government help the needy and what form that help should take.

We’ll start with healthcare:

Worldwide, there are 25 countries that offer universal healthcare, 33 if you include those that simply have an insurance mandate (like the United States under the Affordable Care Act).

The majority function as a single-payer system.  The oldest of these systems is in Norway, which was set up in 1912.  The most recent, in Iceland, was started in 1990.  In this scenario the citizens pay taxes and those taxes pay for their healthcare.  All they need to do is walk into the hospital or doctor’s office and they receive care.  This is something that many Democrats have said they would like to support, a recent and notable example being Senator Bernie Sanders.

Many of the politicians who say they would support such a system also agree that it is not something that would be likely to be passed in the United States any time in the near future without a major shift in public opinion.  In part a big piece of this problem is that the public equates socialism and communism.  All an opponent has to do to bring the public in against a movement towards a single-payer system is to call it socialized medicine (which it is), and people immediately turn against it.

The two-tier system used in the other nine countries is very similar to single-payer system.  It is, however a bit more moderate and some of the countries once had a single-payer system (Canada is a recent example of this).  In the two-tier system, taxes are paid that makes healthcare available to anyone who wants it.  The difference is that there is also the option of getting private health insurance if you would like to pay for it yourself.

In the United States this would still be a pretty liberal plan (because it provides government funded healthcare to everyone) but is moving more towards the center because it leaves the choice of government care and private insurance up to the individual.  I was unable to find an example of a politician in the United States openly supporting a two-tier system but there were plenty of articles from economists and news sources alike saying that Canada’s recent transition will be a good thing and something they will come to regret.  I suppose only time will tell.

Next up is education around the world:

In many countries a primary education is offered for free.  The United States offers up through twelfth grade as public education with an option of paying for private school yourself.  However, there are fewer that offer college for free.  Most of the countries that offer free college are in Europe, but there are a few examples elsewhere, like Brazil and Sri Lanka.

Germany recently made the transition to offering a tuition free university education (in 2014), even for people from other countries.  Meaning a student from the United States or India or anywhere else in the world can go to a German university free of charge so long as they are accepted.

In the United Kingdom the system is not free, but the maximum for tuition and fees is set by the government instead of the universities themselves.  As of 2009 that maximum was set at £9,000, about $13,000, per year for citizens and for people from other countries the fees are between £10,000 and £30,000 ($14,000 – $43,000) for undergraduate degrees, depending on the institution.

Free education is something that Senator Bernie Sanders is also fighting for in his current presidential campaign.  The conservatives however insist that this form of education is not feasible for the United States because it would require a massive tax hike, and increase the countries deficit which is already quite high.  A system where the government pays for or controls the higher education system inevitably falls into the same pitfall that a single-payer healthcare system falls into: it is a socialist plan which many in the United States equate with communism.

Next is retirement programs:

This is an area where the United States is part of the pack.  Most first world countries offer some form of government administered retirement benefits.  In the United Kingdom, Australia, and Canada the system is basically the exact same with some slight differences in the eligible age and the amount paid.  The biggest difference is that many countries encourage corporate pensions to supplement the pay of the government funded plans.  In the United States corporate pensions are becoming less common, instead focusing on private retirement accounts that the employers frequently match payments to.

This is one of the few social welfare programs where the United States matches the rest of the world government wise.  Many countries are even looking at the same questions of raising the retirement age.  Most have the official retirement age is in the mid 60’s and are starting to move to the late 60’s (specifically most of the countries seem to be moving the retirement age to 67 over the next ten years or so).

All in all, the United States is significantly more conservative than the rest of the developed world (at least in terms of the programs we’ve discussed).  This seems to be about par for the course for our country.  In terms of social policy, the American Dream would kind of lend itself towards wanting to provide less assistance to the poor, and less government intervention.  To many in our country, everyone has the ability to go as far as their talents will take them.  It is because of this that people are economically conservative.  They feel like people have the opportunity to help themselves and that it isn’t the government’s job to help them.  That isn’t to say that the public isn’t starting to trend towards the liberal side, but as it stands the country tends to be more conservative. 

Left and Right of Housing

In terms of spending on Welfare Programs goes, housing is just about in the middle of the pack.  Annually the government spends about $560 billion on all of the different types of housing assistance.  These include Section 8, two rural housing programs, and a number of other grants and subsidies to developers, the elderly, and those with a low income.  Most of these programs are administered by the Department of Housing and Development.

This is a program without a lot of policy variety within the parties.  For a general trend the left wants to increase funding and the right wants to decrease the funding.  The extent of the change is different within those groups and there are some subtleties to the plans but that is the way to condense it down as much as possible.

We’ll start with the Democrats.  Clinton’s plan (announced back in February) calls for working on solving some of the causes of homelessness in the United States.  The biggest part of the plan is funding to build a lot of low income housing, to the tune of $125 billion.  The construction projects are intended to both create jobs and increase the available amount of housing, which is one of the problems those who apply for Section 8 housing face.  Sanders hasn’t released a plan that is quite so concrete but has said on several occasions that the 3.5 million estimated homeless people in the United States is unacceptable and he plans to increase the availability of affordable housing and work on reducing homelessness among veterans.

The conservatives would argue against these plans simply on the grounds that it costs the government more money.  This increases the government’s role in people’s lives which goes against everything that they believe.  To the average conservative it isn’t the government’s job to control the housing market, the free market would be best suited to ensure that housing is affordable for low income individuals because there will be more competition.

The Republicans plans are all relatively similar, the amounts are mostly what change.  Cruz wants to entirely cut the Department of Housing and Urban Development.  He insists that it isn’t the government’s job to help people find and afford housing it is the job of the free market to make it available and for people to work hard and pay for it.  Kasich and Trump have not given specific housing policies just that they will reduce non-defense spending significantly.  This is in line with the Republican rhetoric of cutting spending and reducing the government’s role in people’s lives.

The liberals would argue against these cuts because they would suggest that it puts an extra burden on people who are already having trouble.  They would contend that it is very hard to work your way out of homelessness.  It makes it hard to get a job and once the person has one the stress of being homeless makes it harder to keep the job.  Most Democrats would argue that the government needs to help these people, at least temporarily so that they can get up on their own two feet.

Left of Social Security

To many Libreals, Social Security is part of the safety net that helps keep our country secure.  It provides a way to ensure that the elderly and disabled are, at least partially, taken care of financially.  Their philosophy is based on the principle that a society is only as strong as its weakest members.  By providing money that will boost the income of those who don’t have enough income to live on because they have a disability or have reached the point in their life where they can’t work anymore, it increases their purchasing power and helps the incomes of those who pay the taxes that fund Social Security.

If the Libreal plans for Social Security are boiled down, it comes down to ensuring the future of the program by protecting the funds and ensuring that they are available for Social Security and disability payments, and that the money isn’t taken for other programs.  The biggest change that the Libreals have proposed is combining the accounts for Social Security and disability.

The money for both programs is kept in separate accounts and taken as separate pieces in income taxes.  When one program seems to be running short for a month, it has been common practice to shift money between the two.  There are some in Congress who want the practice to stop and who insist that if the program cannot sustain itself with the funding it has it should be cut.

The Democrats have proposed an alternative: rather than collecting separate payments for separate accounts, collect one payment for everything and place it in the same account.  This would remove the need to transfer money between the two, and since the money is handled by the same department, could reduce some of the redundancy in the programs.  Because both of the systems are built on the principle that people who can work pay in and people who can’t take out (with the assumption that they will be taking money when they can’t work), it makes sense to them to unify the two and put the money for both in the same pot.

The Conservatives have argued against this from the traditionalist point of view.  They insist that the system was set up as two different pots for a reason, and that when they were set up it was intended that they were to each be self-sustaining.  While I am sure they enjoy the thought of less government involvement that combining the two accounts would likely bring about, they argue that if one is not sustainable then they should not take money from the other to prop it up.  If one system lacks the funding to continue, then the eligibility criteria be changed to ensure that it has the money that it needs.

In a sense the Conservative plans of privatizing the retirement portion and the Liberal plan to combine the accounts both hope to ensure sustainability of the Social Security program.  While they both go about it in a different manner, everyone agrees that the system itself is important.  Just not how to keep it going.

Right of Social Security

The original Social Security Act was signed by President Franklin Roosevelt on 14 August 1935.  The bill stated that it was “an act to provide for the general welfare by establishing a system of Federal old-age benefits, and by enabling the several States to make more adequate provision for aged persons, blind persons, dependent and crippled children, maternal and child welfare, public health, and the administration of their unemployment compensation laws.”  The program is currently funded entirely by payroll taxes and handled by the Social Security Administration under the Department of Revenue.  It was intended as not only a retirement plan, but also a safety net for those who found themselves unable to work.

There are many who feel that the Social Security system will run out of money in the near future.  However, there are just as many who insist that it will not.  Because there is a large disagreement over whether or not the system can sustain itself, as it currently does, there is an equally large chasm between the liberals and conservatives who look to reform the program.

The Republican candidates (those still in the race and those who have since dropped out) almost universally attest that the way to ensure the future of the Social Security system in the United States is to privatize the system.  This would reduce the government’s role in the process and allow the people to decide how much money to put into the system, when to pay it out, and where it goes.  The vast majority of them also insist that the retirement age needs to be increased.  This would reduce the number of citizens who qualify for payments and would thereby reduce the cost of supporting them.  The name of the game here is reducing the cost and the governments roll.

While there are some very extreme policies that were proposed (Mike Huckabee proposed changing the accounts to 401K plans and Rick Santorum theorized that “abortion culture” was reducing the potential population and causing the problems) the majority of the candidates for president, and those in Congress agree that raising the minimum age (because people live longer) and privatizing the system will lead to a longer life with less cost to the average American and more choice.

The liberals will argue that while people do indeed live much longer than they did over 80 years ago, that doesn’t mean that they are still capable of working later.  Their bodies still change the same way that people did when the Social Security Act was passed.  They will also argue vehemently against privatizing the system.  The key argument in this case is that it will create a much larger risk.  If all of the citizens of the United States have all of their retirement plans invested in the public market then the accounts can lose their reliability.  The liberals would say it is putting all of your eggs in one basket; when the markets tank again and both private and Social Security accounts are controlled by that market then Social Security loses its ability to be an effective safety net.

Left and Right of Food Assistance

The Democrats are seen widely as the champions of food stamps.  Because their platform is partially built around helping the needy and attempting to uplift those who are struggling.  The largest program for food assistance is SNAP (Supplemental Nutrition Assistance Program).  It provides monetary assistance to lower income families to help ensure that they get the food that they need.

The liberals will generally fight to increase funding for the program citing statistics showing that there are 48.8 million food insecure people in the United States, of that 16.2 million are children.  With more funding, at least in theory, fewer of those people would be without food.

The conservatives look at the rapidly inflating cost of SNAP and argue that the nation cannot afford it.  The liberals propose that the funding come from other programs.  They contend that feeding those who are hungry is too important to skip.  To the Democrats, SNAP is essential.

For many liberals the inflation of food assistance spending stems from a bad economy.  Because the economy has been doing poorly people have lost their jobs.  Because they lost their jobs they need to use food stamps to ensure that they are still eating.  The key point of the liberal plans for food assistance is that it is something that the government cannot scrimp on.  The cost may be temporary while people are out of work or it may be longer term if people have trouble finding long term, gainful employment.

Either way, the liberals believe that the program should receive all of the funding it needs.  The money to fund the program can be found.  The typical proposal is what the conservatives usually call a “Robin Hood Tax.”  The taxes on the wealthiest Americans is increased and then used to fund programs that help the poor.

By collecting this extra revenue the liberals hope to find the money that is needed to fund the ever growing number of people who receive food assistance from the government.  By finding a way to cover more people the goal is to reduce the number of people who are food insecure in the United States.

The conservatives lean in the other direction.  Rather than attempting to increase funding to cover more people, they hope to reduce the government’s role.  While most will admit that it is impossible to get rid of the program that so many of their constituents benefit from, they will argue that there are better ways to handle it.

Most conservatives will argue that it is important to address the root causes of the food insecure families in the nation.  Rather than providing a way to get food through government assistance, they hope to help those individuals find jobs that will give them the income needed to provide the food themselves.

This would allow the government to reduce the deficit and reduce its role in everyday life.  If you were to boil the conservative plans down to the bare essence, it would be to focus on jobs and allowing the free market to ensure that the food is easily accessible.  The biggest argument made by those on the right is that by propping up the people with food stamps they are removing the incentive to fix the problems that leave them needing the assitance.

Right of Education

The conservatives in the United States have not been nearly as vocal about their beliefs regarding the higher education system.  However, a lot of their views can be gleaned through looking at the legislation they pass and their policies when in power.  The vast majority of it is pretty expected.  They pass laws reducing government funding of public K-12 and public colleges/universities.  The goal being to reduce government’s role in the system.

The most radical of the conservatives would argue that the government should not be providing education to the public, and that it should be provided, and maintained, by the free market.  The principle argument is that if the schools make themselves too expensive students will not attend because it is affordable.  If the schools are run privately, yes they could charge whatever they wanted to, but they would also have to be competitive.  This not only applies to the cost but to the quality of the education.  By privatizing the system it would allow for greater competition and choice.  It would potentially eliminate exorbitant out of state tuition because the state isn’t paying, and it would bring a better balance between cost and quality.

The more “mainstream” policy stance among conservatives is the desire to reduce federal college loans and instead replace them with insured private loans.  This could create greater transparency in the system and allow students and their parents to make a more informed decision when deciding to take a loan and how much they will borrow.  It also gives them a choice of where they can borrow which would lead to competitive interest rates.  The goal in the end is to greatly reduce, or remove, the government cost of education.  This shift would, in a way similar to privatizing the schools entirely, allow for the free market to decide how students will pay for their school and by changing the availability of funding, it could potentially reduce the overall cost of the education.  They also believe that there should be a higher focus on community college and trade schools built around job specific skills that would better lend themselves directly to a profession.

Most liberals would have essentially the same argument for both plans.  The free market would not result in an equal outcome.  For the extreme policy they would insist that because corporations and people are built specifically to make a profit, the quality of the education would suffer.  Because they would be trying to make the most money possible, they would likely hire substandard teachers because they could be paid less and hike up tuition to increase the bottom line.  They would argue against both points in the second proposal for many of the same reasons.  By privatizing the loans it would allow for less regulation of interest rates and allow more predatory lending.  It would also reduce access to the funding that many families rely on to send their children to school.  They would speculate reducing the access to education it would reduce the ability to pay for the next generation’s access down the line and nearly kill off upward mobility in the economy for lower class families.