In a series of six articles we have outlined the case for a new type of spending reform to be applied to the American welfare state. Instead of rounding off the corners and trying to make the current welfare state work within a narrower tax base, these reforms explain how we can change the very purpose of the welfare state.
Today, our entitlement programs, from Social Security all the way down to SNAP and the EITC, are used for the purposes of economic redistribution. The goal with these programs is not to provide relief for the poor, but to permanently elevate the standard of living of lower-income families with work-based income. Without debating the ideological point per se – whether or not government should be in the business of economic redistribution in the first place – we have to acknowledge that the redistributive welfare state is fiscally unsustainable. As a system, it is unable to pay its own bills over time.
Social Security is the poster child for fiscal unsustainability, but it is not the only program suffering from this inherent weakness. Therefore, as this series of articles has explained, we need to rewrite the purpose of our welfare state – and alter our entitlement programs accordingly.
The only purpose we can give the welfare state that would also allow it to be fiscally sustainable, is to confine it to the function of a last-resort safety net. By providing a basic basket of necessities, constant over time and adjusted only for inflation, the welfare state once again becomes what it was originally designed to do in the hands of Emperor Bismarck, Lord Beveridge and President Franklin Roosevelt.
It deserves to be noted that a socially conservative welfare state is incompatible with libertarian political theory. For the liberty pure, the only acceptable socio-economic organization is one that relies on free markets and private charity. However, that is an entirely unrealistic policy goal in today’s America, and will remain so for the foreseeable future. That does not mean libertarians are wrong in principle, but it means that the socially conservative welfare state is the prudent, balanced compromise that fits American politics as it normally is (outside of heavily contested elections).
We had a socially conservative welfare state for three decades, from the passage of the Social Security Act of 1934 to the launch of President Johnson’s Great Society vision in 1964. Its details are debatable, but in principle it filled the function expectable from a socially conservative perspective.
At the same time, it was also a convenient platform upon which the Johnson administration built our current redistributive, socialist welfare state. The socially conservative welfare state was not given any structural integrity to protect it against further government growth.
The British welfare state had the same experience. What Lord Beveridge outlined in his report to the British parliament in 1946, and what became their equivalent of President Roosevelt’s creation, gradually morphed into the same type of structure for the purposes of economic redistribution that we have.
Both the British and the American welfare states are constructed in the image of the Scandinavian – especially Swedish – welfare state. Unless we understand its ideological architecture, we cannot roll it back and we cannot end the fiscal drainage and economic stagnation that come with this type of welfare state.
It is high time for American politicians from both sides of the aisle to leave their political trenches. This will be impossible until this election is finally settled and certified, but that will only take a few more weeks. Once that issue is settled, the next item on the Congressional agenda must be structural spending reform. As these articles show, such reforms are both necessary and possible.
All we need now is the political will to make it happen.