Social programs in the United States

Social programs in the United States are those institutions, supported or managed by the U.S. government, that aim to ensure economic security, universal access to the resources for self-development and the reduction of social suffering, such as poverty and illness. The main guiding philosophy for the creation of the U.S. welfare state has been modern American liberalism, which holds that positive rights, such as health care and education, are requirements for individual liberty.




History


Unlike in Europe, Christian and Social democracy have not played a major role in shaping welfare policy. Entitlement programs in the U.S. were virtually non-existent until the administration of Franklin Delano Roosevelt and the implementation of the New Deal programs in response to the Great Depression. Between 1932 and 1975, modern liberalism dominated U.S. economic policy and the entitlements grew along with American middle class wealth.




Programs


All about: Social Security (United States)


Overall decline in welfare monthly benefits (in 2006 dollars)
Currently total social welfare expenditure constitutes roughly 35% of GDP, with purely public expenditure constituting 21%, publicly supported but privately provided welfare services constituting 10% of GDP and purely privately services constituting 4% of GDP. This compares to France and Sweden whose welfare spending ranges from 30% to 35% of GDP.
The main programs are mandatory and universal primary and secondary education, subsidized college education, unemployment and disability insurance, income subsidies for low wage workers, housing subsidies, food stamps, pensions and health insurance programs that cover public employees. The Social Security system, is the largest and most prominent entitlement program.
The United States is distinguished from other countries in the developed world for its lack of universal health insurance. Many services provided by the government in most other developed nations, are outsourced to the private sector with the cost borne jointly by employers, employees and government agencies. Critics have charged that this trend burdens American businesses and makes them less competitive, while supporters prioritize lowering the amount of government intervention in the economy.
Although the United States has higher income inequality than many European countries, its welfare programs do not engage in as much income redistribution. In 1998, the United States government's expenditures on subsidies and transfers constituted 11 percent of its GDP, whereas the average government expenditures on subsidies and transfers constituted 19% GDP in countries in the European Union(Alesina, Glaeser, Sacerdote (2000)). Many scholars believe that this is because the United States has a lower level of "reciprocal altruism," and that this is in part a result of its ethnic heterogeneity. A history of perceived high income mobility has promoted a normative belief in American culture that the individual who works hard and perseveres will experience a rise in income, and consequently, economic inequality is often viewed as the just cumulative result of varying degrees of personal responsibility. Some recent studies, however, have shown that income mobility in the U.S. is lower than in Europe today. Asian countries such as Taiwan, Hong Kong, and Singapore have low taxes including a flat income tax; they have low social spending of which very little is categorized as redistribution; all the while income equality is acceptable and income mobility is high.
All Americans are enrolled in the Social Security system, and gain access to public Medicare health insurance once they reach the age of 65. Twenty percent receive health coverage through Medicaid and about 25% receive wage subsidies through the Earned Income Tax Credit (EITC). Current evidence indicates that the American welfare is successful in reducing poverty, inequality and mortality considerably. Public pensions, for instance, are estimated to keep 40% of American seniors above the poverty line.
The American welfare state was designed to address market shortcomings and do what private enterprises cannot or will not do themselves. Unlike welfare states built on social democracy foundations it was not designed to promote a redistribution of political power from capital to labor; nor was it designed to mediate class struggle. Income redistribution, through programs such as the EITC, has been defended on the grounds that the market cannot provide goods and services universally, while interventions going beyond transfers are justified by the presence of imperfect information, imperfect competition, incomplete markets, externalities, and the presence of public goods. The welfare state, whether through charitable redistribution or regulation that favors smaller players, is motivated by reciprocal altruism.
The U.S. government generally refrains from intervention beyond the provision of transfers if markets can produce a given good or service efficiently. There does, however, remain considerable debate on whether the U.S. government is intervening sufficiently to address market shortcomings. Some argue that an expansion of the welfare state is desirable because the market cannot or will not satisfactorily ameliorate unjust economic and social inequality. Others argue that the welfare state has grown too large, and a more laissez-faire form of capitalism is desirable.




Education


All about: Education in the United States




University of California, Berkeley is one of the oldest public universities in the U.S.
Per capita spending on tertiary education is among the highest in the world. Public education is managed by individual states, municipalities and regional school districts. As in all developed countries, primary and secondary education is free, universal and mandatory. Parents do have the option of home-schooling their children, though some states, such as California (until a 2008 legal ruling overturned this requirement), require parents to obtain teaching credentials before doing so. Experimental programs give lower-income parents the option of using government issued vouchers to send their kids to private rather than public schools in some states/regions.
As of 2007, more than 80% of all primary and secondary students were enrolled in public schools, including 75% of those from households with incomes in the top 5%. Public schools commonly offer after-school programs and the government subsidizes private after school programs, such as the Boys & Girls Club. While pre-school education is subsidized as well, through programs such as Head Start, many Americans still find themselves unable to take advantage of them. Some education critics have therefore proposed creating a comprehensive transfer system to make pre-school education universal, pointing out that the financial returns alone would compensate for the cost.
Tertiary education is not free, but is subsidized by individual states and the federal government. Students may attend public institutions or private institutions. Some of the costs at public institutions is carried by the state.
The government also provides grants, scholarships and subsidized loans to most students. Those who do not qualify for any type of aid, can obtain a government guaranteed loan and tuition can often be deducted from the federal income tax. Despite subsidized attendance cost at public institutions and tax deductions, however, tuition costs have risen at three times the rate of median household income since 1982. In fear that many future Americans might be excluded from tertiary education, progressive Democrats have proposed increasing financial aid and subsidizing an increased share of attendance costs. Some Democratic politicians and political groups have also proposed to make public tertiary education free of charge, i.e. subsidizing 100% of attendance cost.


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