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"The welfare state produces poverty"
#1
Sure, it can produce dependency, when it's overly generous, but in the US that's almost certainly not the norm. And there is substantial evidence that it helps alleviate poverty

Return of the Undeserving Poor

When I was growing up, income inequality wasn’t yet a big issue, because the middle class was strong and the plutocracy fairly marginal. But there was a great deal of alarm over the troubles of the African-American community, where social disorder was on the rise even as explicit legal discrimination (although not de facto discrimination) was coming to an end. What was going on?

There were all kinds of theories, ranging from cultural hand-waving to claims that it was all because of welfare. But some people, notably William Julius Wilson, argued that the underlying cause was economic: good jobs, while still fairly plentiful in America as a whole, were disappearing from the urban centers where the A-A population was concentrated. And the social collapse, while real, followed from that underlying cause.

This story contained a clear prediction — namely, that if whites were to face a similar disappearance of opportunity, they would develop similar behavior patterns. And sure enough, with the hollowing out of the middle class, we saw (via Mark Thoma) what Kevin Williamson at National Review describes as


Quote:the welfare dependency, the drug and alcohol addiction, the family anarchy

And what is the lesson? Why, that poor whites are moral failures, and they should move to where there are opportunities (where?). It’s really extraordinary. Oh, and lots of swipes at food stamps, welfare programs, disability insurance (which conservatives insist is riddled with fraud, despite lots of evidence to the contrary.)


It’s surely worth noting that other advanced countries, with much more generous welfare states, aren’t showing anything like the kind of social collapse we’re seeing in the U.S. heartland. Here’s Case and Deaton:
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Why, it’s almost as if having a strong safety net leads to better, not worse, social health. Culture still matters: US Hispanics do a lot better than one might have expected. But the idea that somehow food stamps are why we’re breaking bad is utterly at odds with the evidence. (Just as an aside, since someone will bring it up: all of those other advanced economies are just as open to trade as we are — so whatever you think of free trade, it doesn’t necessarily cause social collapse.)

Anyway, the right’s inability to face up to the evidence on this front is … just like its inability to face up to evidence on any other front.
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#2
But maybe not..

Quote:Safety net programs cut the poverty rate nearly in half in 2015, lifting 38 million people — including 8 million children — above the poverty line, our analysis of Census data released yesterday finds.  The Census data show the impact of a broad range of government assistance, such as Social Security, SNAP (formerly food stamps), Supplemental Security Income, rent subsidies, and tax credits for working families like the Earned Income Tax Credit (EITC) and Child Tax Credit.  The figures rebut claims that government programs do little to reduce poverty.
Safety Net Cut Poverty Nearly in Half Last Year | Center on Budget and Policy Priorities
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#3
In fact, the welfare state could very well boost entrepreneurial activity..


Quote:For a prospective entrepreneur, the choice usually isn’t between starting a business and playing video games -- it’s between starting a business and working for someone else. The difference in effort between those two career paths probably isn’t that big. But entrepreneurship is much, much riskier than holding a job. In general, you’re a lot more likely to see your business fail than to be fired.

The risk theory of entrepreneurship says that when people already have a lot of risk, they’re less likely to take on more. This is just because most people are risk-averse -- if they’re under threat of losing their job or paying a huge medical bill, they’re probably going to be less willing to gamble all of their savings on starting a company.

So if the risk theory is right, a stronger safety net should lead to more entrepreneurial activity, not less. Whatever negative effect public assistance has on effort will be more than canceled out by the greater risk-taking capacity of the poor and unemployed.

That’s what the evidence seems to indicate. A 2004 study showed that food stamps make people more likely to open a business. Another study in 2012 demonstrated that giving extended unemployment benefits also makes people more likely to start companies.

Now we have yet another piece of evidence. Economists Joshua Gottlieb, Richard Townsend and Ting Xu studied the effects of maternity leave in Canada. They found that women who had the guaranteed option to return to their jobs after maternity leave were more likely to start businesses. The reduction in risk from having the fallback option made entrepreneurs more willing to take the plunge. That’s the opposite of what an effort-based model would predict.
Want More Startups? Build a Better Safety Net - Bloomberg View
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#4
Quote:The social safety net is forever at risk of becoming a hammock, to use House Speaker Paul D. Ryan’s memorable metaphor. That, anyway, is an operating assumption behind much of the discussion of social welfare programs. Economists have often taken it as a given that there is an inherent trade-off in which the larger the social safety net, the fewer people will work

But what if that framing is backward? Certain social welfare policies, according to an emerging body of research, may actually encourage more people to work and enable them to do so more productively. That is the conclusion of work that aims to understand in granular detail how different government interventions affect people’s behavior. It amounts to a liberal version of “supply-side economics,” an approach to economics often associated with the conservatives of the Reagan era.
Supply-Side Economics, but for Liberals - The New York Times
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#5
Quote:More than 130,000 deaths in the UK since 2012 could have been prevented if improvements in public health policy had not stalled as a direct result of austerity cuts, according to a hard-hitting analysis to be published this week. The study by the Institute for Public Policy Research (IPPR) thinktank finds that, after two decades in which preventable diseases were reduced as a result of spending on better education and prevention, there has been a seven-year “perfect storm” in which state provision has been pared back because of budget cuts, while harmful behaviours among people of all ages have increased.
Austerity to blame for 130,000 ‘preventable’ UK deaths – report | Politics | The Guardian
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