The Freeman 1972 - The Ludwig von Mises Institute

1972 THE BALLOONING WELFARE STATE 227Then, in 1948, as a result of thereport of Sir William Beveridge,the whole system of compulsorycontributions for social insurancewas immensely extended, withwider unemployment benefits, sicknessbenefits, maternity benefits,widows' benefits, guardians' allowances,retirement pensions, anddeath grants.The continuous expansion of"social security" and welfare servicesin Great Britain is typical ofwhat has happened in most othercountries in the Western worldover the last half century. Thebroad pattern has been remarkablysimilar: a multitude of "insurance"programs, supported in partby compulsory contributions andin part by general tax funds,ostensibly protecting everyoneagainst the hazards of poverty,unemployment, accident, sickness,old age, malnutrition, "substandard"housing, or almost any otherimaginable lack; programs expandingyear by year in the numberof contingencies covered, inthe number of beneficiaries undereach program, in the size of individualbenefits paid, and ofcourse in the total financial burdenimposed.So, year by year, the tendencyhas been for every working personto pay a higher percentage of hisearned income either for his owncompulsory "insurance" or for thesupport of others. Year by year,also, the total burden of taxestends to go up, both absolutelyand proportionately. But directand acknowledged taxes havetended to go up less than totalexpenditures. This has led tochronic deficits that are met byprinting more irredeemable papermoney, and so to the almost universalchronic inflation that marksthe present age.Growth 01 Welfare Programsin the u.s. since J935Let us look at the ballooningwelfare state in detail as it hasdeveloped in our own country.We may begin with PresidentFranklin D. Roosevelt's 1935 messageto Congress in, which he declared:"The Federal Governmentmust and shall quit this businessof relief.... Continued dependenceupon relief induces a spiritual andmoral disintegration, fundamentallydestructive to the nationalfiber."The contention was then madethat, if unemployment and oldage"insurance" were put into effect,poverty and distress wouldbe relieved by contributory programsthat did not destroy the incentivesand self-respect of the recipients.Thus relief could graduallybe tapered off to negligiblelevels.