The social safety net = economic prosperity

Conservatives love to talk about how “welfare” and “entitlement” programs destroy the character of Americans by undermining their willingness to work and generate economic prosperity.

There are all sorts of problem with this view. Among them, what’s the evidence? There are plenty of rich people who could retire today with a high quality of life, but something keeps them coming to work. And if this character destruction is true, why, then, don’t we have a 100% estate tax. For gosh sake, we’re actually harming those children of rich kids by not giving them enough incentives to get out there and produce! And it’s a view that’s a bit heartless. The idea is that the suffering caused by the vagaries of life – or yes, even by people who just plain screwed up – is okay because it builds character.

But these arguments and others against don’t go far enough. They just refute the conservative viewpoint.

But this essay in the latest issue of the American Prospect goes a step further. It provides a positive economic reason to advocate for the social safety net. Our economy would be more flexible, more dynamic, and more robust if we provided people with enough shelter from substantial risks (like losing employment and health care) so that they could try out new economic undertakings and grow the economy.

Now, being a good liberal, I would want to put some studies and numbers behind this notion. How much additional economic growth would be created if people were more free economically speaking because they didn’t have to live in the “quiet desperation” of losing their health care? That’s an interesting liberal economic research project.

Update: Here’s a link ($) to a WSJ article comparing the social safety nets of Germany and the U.S. and the various trade-offs and impact of the two systems. The WSJ still does some excellent journalism.

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