9.6-9.13 - American Politics and Social Welfare Policy...

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American Politics and Social Welfare Policy 9.6-9.13 Americans, overwhelmingly, think the government should help the poor; but, as soon as you attach the word “welfare,” Americans get skittish and opinions turn unfavorable What do we mean by “welfare?” - food stamps and other policies that provide means-tested benefits - direct cash handouts to those who don’t/can’t work (disabled, have children, retired, elderly); TANF - negative perception of those who can work but choose not to o how do you distinguish b/w those who are legitimately not working and those who “don’t want to?” - Transferring resources (redistribute) from one part of society to another - “safety net” to assist those suffering in a risk-based society; protects from risk Think of welfare state as an insurance scheme What is insurance? - you pay money—premiums-- into a fund that helps you (e.g. car insurance, where you pay into fund and benefit in event you are in an accident) 500 years ago, risks associated with everyday life were different; the welfare state is a product of industrialization and the expansion of market economies Other welfare programs 1) Social Security a. Money deducted from your pay supports gov’t pensions 2) Health care a. Medicare b. Medicaid 3) Earned Income Tax Credit a. Gov’t subsidy for those under a certain income; the government will deduct EITC from the amount of taxes you actually pay b. Refundable: if credit is more than you owe, you will actually get the amount of the credit (if you owe $100 and EITC is $150, you receive $50 refund) 4) TANF (Temporary Aid to Needy Families) a. Cash assistance to poor families, mostly single women with children 5) Minimum wage 6) Public education How much does U.S. spend on welfare, out of $2.47 trillion budget? - Almost 20% or $519 billion was spent on Social Security - Medicare spending was $333 billion - Medicaid spending was $182 billion - TANF : $9.5 billion
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- TANF + SSI (supplemental security income) + food stamps : $81 billion (about 3%) - EITC : $49 billion (about 2%) How much of GDP does U.S. spend on welfare? - 1990’s: U.S. spent 17.1% of GDP - Compare this to other countries o Sweden: 36.4% o Canada: 20.8 % o UK: 25.9% o Germany: 30.4% However, if you note health and pension benefits that come from private employers, total welfare takes up about 1/3 of GDP in the United States - so, in talking about welfare, we must consider both the public and the private Why does the U. .S. spend $500 b a year on the elderly/retired, yet far less on the poor? - elderly vote, while the poor/children vote in smaller numbers - look to new prescription drug benefit - struggle in choosing “who’s deserving” and who isn’t And why is our spending so much less than that of other similar countries? -
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9.6-9.13 - American Politics and Social Welfare Policy...

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