Most of today's benefits were created at the point of passing the Social Security Act 1938 or after. During the post-war years benefit levels were reasonably stable despite population growth. For instance between 1940 and 1975 the population grew by 92 percent but receipt of Unemployment, Sickness and Invalid benefits grew by only 9 percent. As a percentage of working age people, reliance on these benefits actually dropped.
Compare this to the next almost 35 year period - 1975 to 2009 - and the picture is vastly different. Reliance on the same three benefits grew by 903 percent or 9 times. The population grew by a mere 37 percent over the same period.
What if benefit dependence had stayed at 1975 levels?
Using some rough estimates based purely on total population growth it would look something like this;
Unemployment benefit 3,964
Sickness benefit 10,727
Invalid's benefit 12,897
Add in the DPB created in 1973;
That's a total of 51,194.
But the actual total today is 309,717. The difference in terms of expenditure is $5.17 billion.
How much tax per earner (2.154 million)?
Unlike purist libertarians I do not advocate wholesale destruction of the welfare state although I understand why they do. It is a too unrealistic proposition to advance the cause of welfare reform.
But a return to respect for benefits and taxpayers, an avoidance of moral hazard through education, and levels of reliance that reflect genuine incapacity or emergency, would see us all much, much better off.
(And yes, I do realise this is a very simplistic calculation and there are umpteen factors and objections that could be made, both statistical and philosophical.)
Thursday nightCap [MUST SEE]
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