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.