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The Social Security Administration, created in 1935, was the first major federal welfare state agency and continues to be the most prominent.[1] The United States welfare state refers to those institutions, supported or managed by the U.S. government, that aim to ensure economic security, universal access to the resources for self-development and the reduction of social suffering, such as poverty and illness.[2] The main guiding philosophy for the creation and expansion of the U.S. welfare state has been modern liberalism, which holds that positive rights, such as health care and education, are requirements for individual liberty.[3][4][5] Contents 1 History 2 The modern U.S. welfare state 3 Education 4 See also 5 References // History Unlike in Europe, Christian and Social democracy have not played a major role.[6] A federal welfare state in the U.S. was virtually non-existent until the administration of Franklin Delano Roosevelt and the implementation of the New Deal programs. Between 1932 and 1975, modern liberalism dominated U.S. economic policy and the welfare state grew considerably faster than GDP. The modern U.S. welfare state Overall decline in welfare monthly benefits (in 2006 dollars) [7] Currently total social welfare expenditure constitutes roughly 35% of GDP, with purely public expenditure constituting 21%, publicly supported but privately provided welfare services constituting 10% of GDP and purely privately services constituting 4% of GDP.[8][9] Its main components are mandatory and universal primary and secondary education, somewhat subsidized tertiary education, unemployment and disability insurance, income subsidies for low wage workers, housing subsidies, food stamps, guaranteed public pensions and public health insurance programs that cover roughly 20% of the population but pay approximately 50% of all medical bills nationwide. The Social Security system, which encompasses most social insurance programs is the most prominent part of the American welfare state, and remains the largest government program in the United States and the world.[1][10] The American welfare state is distinguished from other welfare states in the developed world through its extensive reliance on the private sector, and the lack of universal income support and universal health insurance. Many services provided by the government in most other developed nations, are outsourced to the private sector with the cost borne jointly by employers, employees and government agencies.[11] Critics have charged that this trend burdens American businesses and makes them less competitive, while supporters claims that it lowers the amount of government intervention in the economy.[12] While all Americans are enrolled in the Social Security system, have access to public Medicare health insurance once they reach the age of 65, 20% receive health coverage through Medicaid and about 25% receive wage subsidies through the Earned Income Tax Credit (EITC), most welfare state programs usually do not serve more than 5%-10% of the public.[13] Current empirical evidence indicates that the American welfare is successful in reducing poverty[citation needed], inequality and mortality considerably. Public pensions, for instance, are estimated to keep 40% of American seniors above the poverty line.[14] The American welfare state is designed to address market shortcomings and do what private enterprises cannot do themselves. Unlike welfare states built on democratic socialist foundations it is not designed to accomplish a Marxist redistribution of political power from capital to labor; nor is it designed to mediate class struggle, as is the case with corporatist welfare states.[6] Income redistribution, through programs such as the EITC, is justified since 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.[2] The U.S. government generally refrains from intervention beyond the provision of transfers if markets can produce a given good or service efficiently. There does, however, remain considerable debate on whether the U.S. government is intervening sufficiently to address market shortcomings. Liberal Democrats argue that an expansion of the welfare state is desirable and too many market failures remain unaddressed. Meanwhile, conservative Republicans argue that the welfare state has grown too large, and a more laissez-faire form of capitalism is desirable.[15] Education This section needs additional citations for verification. Please help improve this article by adding reliable references. Unsourced material may be challenged and removed. (April 2010) The neutrality of this article is disputed. Please see the discussion on the talk page. Please do not remove this message until the dispute is resolved. (April 2010) This section needs attention from an expert on the subject. See the talk page for details. WikiProject Education or the Education Portal may be able to help recruit an expert. (April 2010) This section may contain original research. Please improve it by verifying the claims made and adding references. Statements consisting only of original research may be removed. More details may be available on the talk page. (April 2010) University of California, Berkeley is one of the oldest public universities in the U.S. Per capita spending on tertiary education is among the highest in the world.[citation needed] Public education is managed by individual states, municipalities and regional school districts. As in all developed countries, primary and secondary education is free, universal and mandatory. Parents do have the option of home-schooling their children, though some states, such as California (until a 2008 legal ruling overturned this requirement), require parents to obtain teaching credentials before doing so.[citation needed] Lower-income parents also have the option of using government issued vouchers to send their kids to private rather than public schools in some states/regions. As of 2007, more than 80% of all primary and secondary students were enrolled in public schools, including 75% of those from households with incomes in the top 5%.[citation needed] Public schools commonly offer after-school programs and the government subsidizes private after school programs, such as the Boys & Girls Club.[citation needed] While pre-school education is subsidized as well, through programs such as Head Start, many Americans still find themselves unable to take advantage of them. Some education critics[who?] have therefore proposed creating a comprehensive transfer system to make pre-school education universal, pointing out that the financial returns alone would compensate for the cost.[citation needed] Tertiary education is not free, but highly subsidized. Students may attend public institutions, run by individual states or major cities or federally by the U.S. military, or private institutions. The vast majority of costs at public institutions is carried by the state, with the student paying only a fraction (e.g. 30% in the California State University system)[citation needed]. Roughly half of all college students attend 2-year community colleges, which are always public and feature the lowest tuition fees (e.g. less than $1,500 per year in California).[citation needed] The government also provides grants, scholarships and subsidized loans to most students. Those who do not qualify for any type of aid, can obtain a government guaranteed loan and tuition can often be deducted from the federal income tax. Despite subsidized attendance cost at public institutions and tax deductions, however, tuition costs have risen at three times the speed of median household income since 1982.[16] In fear that many future Americans might be excluded from tertiary education, liberals have proposed increasing financial aid and subsidizing an increased share of attendance costs. Some liberals have also proposed to make public tertiary education free of charge, i.e. subsidizing 100% of attendance cost.[citation needed] See also Education in the United States Personal Responsibility and Work Opportunity Act Goldberg v. Kelly European welfare state Cloward–Piven strategy Flemming v. Nestor Federal Insurance Contributions Act Great Society Medicaid Medicare (United States) New Deal Patient Protection and Affordable Care Act Section 8 (housing) Social Security (United States) Supplemental Security Income Social Security Disability Insurance Supplemental Nutrition Assistance Program Retirement Insurance Benefits State Children's Health Insurance Program Temporary Assistance for Needy Families Modern liberalism in the United States War on Poverty Welfare Welfare economics WIC References ^ a b Krugman, P. (2007). The Conscience of a Liberal. New York: W. W. Norton ^ a b Barr, N. (2004). Economics of the Welfare State. New York: Oxford University Press, USA. ^ McGowan, J. (2007). American Liberalism: An interpretation for our time. Chapel Hill, NC: North Carolina University Press. ^ Starr, P. (2007). Freedom's Power: The true force of liberalism. New York: Basic Books ^ Schwartz, J. E. (2005). Freedom Reclaimed: Rediscovering the American vision. Baltimore: Johns Hopkins University Press. ^ a b Esping-Andersen, G. (1991). The Three Worlds of Welfare Capitalism. Princeton, NJ: Princeton University Press. ^ 2008 Indicators of Welfare Dependence Figure TANF 2. ^ Alber, J. (1988). Is There a Crisis of the Welfare State? Cross-National Evidence from Europe, North America, and Japan. European Sociological Review, 4(3), 181-207. ^ Hacker, J. S. (2002). The Divided Welfare State. New York: Cambridge University Press, USA. ^ Feldstein, M. (2005). Rethinking social insurance. American Economic Review, 95(1), pp. 1-24. ^ Hacker, J. S. (2006). The Great Risk Shift: The new economic insecurity and decline of the American dream. New York: Oxford University Press, USA ^ Cohn, J. (2008). Auto Destruct: The tragic nobility of Detroit. The New Republic: http://www.tnr.com/politics/story.html?id=cecbd59f-ab0c-4bd6-9f78-bf9f99cd5c80 ^ MaCurdy, J. & Jones, J. M. (2008). Welfare. The Concise Encyclopedia of Economics and Liberty: http://www.econlib.org/library/Enc/Welfare.html ^ Orr, D. (November - December, 2004). Social Security isn't broken: So why the rush to 'fix ' it? In C. Sturr & R. Vasudevan (Eds.), 2007, Current economic issues. Boston: Economic Affairs Bureau. ^ Behravesh, N. (2008). Spin-Free Economics: A no-nonsense, nonpartisan guide to today's global economic debates. New York: McGraw Hill. ^ Lewin, Tamar. "NYT on increase in tuition". The New York Times. http://community.nytimes.com/article/comments/2008/12/03/education/03college.html?permid=51. Retrieved 2009-01-15.