Federally funded and governed US welfare began in the 1930's during the Great Depression. The US government responded to the overwhelming number of families and individuals in need of aid by creating a welfare program that would give assistance to those who had little or no income. The US welfare system stayed in the hands of the federal government for the next sixty-one years. Many Americans were unhappy with the welfare system, claiming that individuals were abusing the welfare program by not applying for jobs, having more children just to get more aid, and staying unmarried so as to qualify for greater benefits. Welfare system reform became a hot topic in the1990's. Bill Clinton was elected as President with the intention of reforming the federally run US Welfare program.
In 1988, Ronald Reagan traveled to the Soviet Union and gave a speech at Moscow State University, making the case for capitalism. America’s secret, he argued, was its entrepreneurs, whose “courage to take risks” was responsible “for almost all the economic growth in the United States” and much of its technological edge. This risk-taking was made possible, he continued, by economic freedom, which he associated with “limited, unintrusive” government. Reagan was right about the link between startups and growth, but wrong in assuming that small government was the way to encourage them. His belief in a tradeoff between taking care of citizens and promoting innovative new businesses is at odds with the evidence.
The federal government collects taxes to finance various public services. As policymakers and citizens weigh key decisions about revenues and expenditures, it is instructive to examine what the government does with the money it collects. In fiscal year 2014, the federal government spent $3.5 trillion, amounting to 20 percent of the nation’s Gross Domestic Product (GDP). Of that $3.5 trillion, over $3.0 trillion was financed by federal revenues. The remaining amount ($485 billion) was financed by borrowing. As the chart below shows, three major areas of spending each make up about one-fifth of the budget:
Food stamps. Unemployment benefits. Social security. Earned income tax credits. Do these social welfare programs work? Yes, according to a new study from the Pew Charitable Trusts. Safety nets like food stamps prevent millions more people from struggling to put food on the table, says Jake Grovum, who analyzed the data for the Pew Charitable Trusts.
The Temporary Assistance to Needy Families (TANF) program was created by what is commonly referred to as “welfare reform” in 1996. It replaced Aid to Families with Dependent Children (AFDC) as the program through which some low-income families are able to receive cash assistance. With TANF authorization expiring at the end of March and needing to be renewed (and hopefully improved)—and over 46 million people still living below the poverty line of $23,021 for a family of four—here are ten things you should know about the program: