American Welfare State Eclipses Canada, Italy, Denmark and Austria
America now has a bigger welfare state than most countries, effectively doling out more welfare than Canada, Denmark, Austria, and Italy. As the New York Times’ David Brooks notes today, “When you include both direct spending and tax expenditures, the U.S. has one of the biggest welfare states in the world. We rank behind Sweden and ahead of Italy, Austria, the Netherlands, Denmark, Finland and Canada. Social spending in the U.S. is far above the organization’s average.”
Eventually, this welfare state is likely to be a major drag on economic growth (America’s per capita debt is already worse than Greece). But for the time being, America is still richer than most other Western countries, despite the disincentives to work resulting from its welfare spending, which has increased enormously over the last few years. (Work disincentives in Obamacare alone may wipe out 800,000 jobs). It takes time for a huge welfare state to shrink a country’s economy.
There are now a record 47 million people on food stamps. To cash in on generous federal subsidies that reward states for increasing the number of people on food stamps, some states are deliberately qualifying for food stamps millions of non-poor people who are lucky enough to receive state housing, heating, or other subsidies despite being able to support themselves.
The Obama administration is busy cracking down on states that attempt to reduce food stamp fraud, as James Bovard noted earlier in The Wall Street Journal. Food stamp fraud costs America billions of dollars. This is remarkable, since eligibility requirements are so lax that no fraud is even needed for many undeserving people to collect food stamps.
As Bovard noted, the Obama administration has encouraged states to abolish asset tests for food stamps, leaving even unemployed millionaires able to qualify: “Millionaires are now legally entitled to collect food stamps as long as they have little or no monthly income. Thirty-five states have abolished asset tests for most food-stamp recipients. These and similar ‘paperwork reduction’ reforms advocated by the United States Department of Agriculture (USDA) are turning the food-stamp program into a magnet for abuses and absurdities.”
The Obama administration’s $800 billion stimulus package also largely repealed the 1996 welfare-reform law, as Slate’s Mickey Kaus and the Heritage Foundation have noted, making it easier for many people to go on welfare.