Chart of the day

No, the welfare state is not killing us.  We’re not going to become Greece because we’re spending too much on social services.  There’s basically no relationship between social spending and economic growth.  Via Matthew O’Brien:


I know this picture is worth 1,000 words, but here are four more. There is no pattern…

It hasn’t exactly been a good decade for growth anywhere in the rich world. But it hasn’t been any worse for countries with big welfare states versus countries with small welfare states. Yes, social programs can affect growth. But so do other things. Like monetary policy. Or smart taxes. And that most ineffable of qualities, a strong entrepreneurial culture. Which, ironically, might be strengthened by some elements of the social safety net.

You don’t need to sacrifice economic security for economic growth. Other countries manage both just fine. Actually, the U.S. is in better shape than most other rich countries because our demographic crunch is much less … crunchy? Our society is still growing, if aging.
Hear that sound? It’s the death knell of the death knell of the welfare state.

About Steve Greene
Professor of Political Science at NC State

One Response to Chart of the day

  1. itchy says:

    The pattern is obvious. Do not spend 23 percent. 22.9 is OK. 22.5 is great. Just not 23.

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