It’s unfair to group the ‘welfare state’ into single lump

Contributing WriterNovember 22, 2012 

Often, holiday meals like those at my house consist of a range of separate contributions which collectively add up to the Thanksgiving dinner. As we sit down to partake of the varied assortment of dishes, no one would think of criticizing the turkey because the mushroom soup dish contained more fried onion rings than green beans, or because someone insisted on adding a bag of marshmallows to the sweet potatoes.

The fact that different dishes are on the same table doesn’t somehow turn them into one “dish” called “Thanksgiving Dinner” that deserves a singular judgment. Instead, we pass judgment on the successful (and quietly perhaps, the less successful) features of each individual dish.

I make this somewhat obvious point because Robert Samuelson’s recent column (TNT, 11-14), which calls for us to overhaul our “welfare state,” ignores it: He unfairly and inaccurately takes aim at everything on the “welfare state” table when his true target is a few select items that share little in common with the rest.

Samuelson’s criticism of our nation’s “welfare state,” which he defines as all federal transfers to citizens, is that expenditures are on an unsustainable upward trajectory that we just can’t afford. The welfare state, he tells us, already costs us 20 cents out of every $1 of our nation’s income.

“How much compassion can society afford?” he asks, and then answers by saying the long-term health of our country depends on controlling growth in all of these government programs.

Samuelson’s criticism of the welfare state is disingenuous because he includes under the welfare umbrella every government program that provides income support to citizens – for instance, unemployment insurance, food stamps, Medicare and Social Security. He leaves us with the impression that they all suffer from the same problem of escalating costs that for political reasons continue to grow.

If you group all federal transfers together and call this “the welfare state” – this is my equivalent of lumping all dishes on the Thanksgiving table together and calling it a singular “Thanksgiving Dinner” dish – it is true that collectively these payments are growing at an escalating and unsustainable rate. But the reasons for this are twofold and have nothing to do with politics.

One reason is an aging population that results in a growing numbers of citizens eligible for Social Security and Medicare while fewer and fewer working-age citizens are left to pay the taxes to support them.

A second reason why the so-called welfare state is so large and growing is because of the rising cost of health care that each year causes our Medicare and Medicaid bills to swell.

If you take Social Security and health care off the table – as I believe is consistent with how most Americans define welfare – by no means could you say that a crisis looms with the programs that remain. Left on the table is primarily transfers to the poor, which collectively cost us about a penny out of every dollar of the nation’s income. In the depth of the recent recession, another penny went to pay unemployment compensation, but those costs are quickly falling from more than $150 billion to soon about $50 billion per year.

Moreover, if anything there is a downward, not upward, trend in the collective costs to us of these programs.

It’s clear Samuelson thinks we spend too much to help out our nation’s poor. But it’s deceptive to criticize such programs by referencing the challenges we face with Social Security and our health care costs.

If Samuelson wants to find fault with programs helping low-income citizens, he should do so by judging them based on their individual features rather than by the characteristics of programs that happen to fit into some common category he’s created. He should do the same thing, in other words, that most of us will be doing when we sit down to a table filled with a wide range of different dishes: Judge each on its own merits.

Katie Baird is an associate professor of economics at the University of Washington Tacoma. Email her at kebaird@uw.edu.

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