November 28, 2014

WE DON'T NEED TO SPEND MUCH MORE...:

Our giant welfare state (Robert J. Samuelson  November 25, 2014, Washington Post)

The Organization for Economic Cooperation and Development (OECD) -- a group of wealthy nations -- has recently published new figures on government social spending. Covered is unemployment insurance, disability payments, old-age assistance, government-provided health care, family allowances and the like. By this measure alone, the United States is hardly a leader. It ranks 23rd in the world with social spending of roughly 19 percent of gross domestic product (GDP). This is slightly below the OECD average of 22 percent. France is the champ at nearly 32 percent. (The data are generally the latest available, including some estimates for 2014.)

But wait. Direct government spending isn't the only way that societies provide social services. They also channel payments through private companies, encouraged, regulated and subsidized by government. This is what the United States does, notably with employer-provided health insurance (which is subsidized by government by not counting employer contributions as taxable income) and tax-favored retirement savings accounts.

When these are added to government's direct payments, rankings shift. France remains at the top, but the United States vaults into second position with roughly 30 percent of its GDP spent on social services, including health care. We have a hybrid welfare state, partly run by the government and partly outsourced to private markets.


...just transfer more of it to personal savings accounts.

Posted by at November 28, 2014 5:29 PM
  

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