All ‘societies take steps to provide for their poor citizens.But what is given to the poor must come from other gorps, and that is’ undoubtedly the major Point of resistance to re-distributive programs.In addition economists worry about the impact of redistribution upon the efficiency and morale of a country These issues assume greater importance as resistance to tax increases has stiffened. In this second, we review the rise of the transliterate, consider the costs of income redistribution, and survey the current system of income maintenance.
The Rise of the Welfare State
The early classical economists believed the distribution of income was unalterable. They argued that attempts to alleviate ‘poverty by government interventions in the economy were foolish endeavors that would simply end up reducing total national income. This view-was contested by the English economist and!,her John Stuart Mill. While cautioning against interference with the market mechanism, he argued eloquently that government policies could reduce inequality.
A half-century later, at the end of the nineteenth century, political leaders in Western Europe took steps that marked a historic turning point in the economic role of government. Bismarck in Germany, Glads?ne and Disraeli in Britain, followed by Franklin Roosevelt 10 the United States introduced a new concept of government responsibility for the welfare of the populace.
I portent. welfare-state policies· include public pensions, accident and sickness insurance, unemployment insurance, health insurance, food and housing programs, family allowances, and income supplements for certain groups of people. These policies were introduced gradually from 1880 through to the modem era. The welfare state came late to the United States, being introduced in the New Deal of the 19305 with unemployment insurance and social security. Medical care for the aged and the poor was added in the 1960s. Most high-income countries provide universal health care for their citizens, but. after a fierce debate in 1994, the U.S. ingress decided not to pass universal health benefits,•In 1996 the federal government turned back’ the clock by removing the guarantee of a minimum income. The debate over redistribution never ends.
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