Analysis
The American welfare state was designed to address market shortcomings and do what private enterprises cannot or will not do themselves. Unlike welfare states built on social democracy foundations it was not designed to promote a redistribution of political power from capital to labor; nor was it designed to mediate class struggle. Income redistribution, through programs such as the Earned income tax credit (EITC), has been defended on the grounds that the market cannot provide goods and services universally, while interventions going beyond transfers are justified by the presence of imperfect information, imperfect competition, incomplete markets, externalities, and the presence of public goods. The welfare state, whether through charitable redistribution or regulation that favors smaller players, is motivated by reciprocal altruism.
Unlike in Europe, Christian democratic and social democratic theories have not played a major role in shaping welfare policy in the United States. Entitlement programs in the U.S. were virtually non-existent until the administration of Franklin Delano Roosevelt and the implementation of the New Deal programs in response to the Great Depression. Between 1932 and 1981, modern American liberalism dominated U.S. economic policy and the entitlements grew along with American middle class wealth.
Read more about this topic: Social Programs In The United States
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