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By the end of this section, you will be able to:
In practice, public policy consists of specific programs that provide resources to members of society, create regulations that protect U.S. citizens, and attempt to equitably fund the government. We can broadly categorize most policies based on their goals or the sector of society they affect, although many, such as food stamps, serve multiple purposes. Implementing these policies costs hundreds of billions of dollars each year, and understanding the goals of this spending and where the money goes is of vital importance to citizens and students of politics alike.
The U.S. government began developing a social welfare policy during the Great Depression of the 1930s. By the 1960s, social welfare had become a major function of the federal government—one to which most public policy funds are devoted—and had developed to serve several overlapping functions. First, social welfare policy is designed to ensure some level of equity in a democratic political system based on competitive, free-market economics. During the Great Depression, many politicians came to fear that the high unemployment and low-income levels plaguing society could threaten the stability of democracy, as was happening in European countries like Germany and Italy. The assumption in this thinking is that democratic systems work best when poverty is minimized. In societies operating in survival mode, in contrast, people tend to focus more on short-term problem-solving than on long-term planning. Second, social welfare policy creates an automatic stimulus for a society by building a safety net that can catch members of society who are suffering economic hardship through no fault of their own. For an individual family, this safety net makes the difference between eating and starving; for an entire economy, it could prevent an economic recession from sliding into a broader and more damaging depression.
One of the oldest and largest pieces of social welfare policy is
Social Security , which cost the United States about $845 billion in 2014 alone.
“An Update to the Budget and Economic Outlook: 2014 to 2024,” 27 August 2014. https://www.cbo.gov/publication/45653 (March 1, 2016). These costs are offset by a 12.4 percent payroll tax on all wages up to $118,500; employers and workers who are not self-employed split the bill for each worker, whereas the self-employed pay their entire share.
“Update 2016,” https://www.ssa.gov/pubs/EN-05-10003.pdf (March 1, 2016). Social Security was conceived as a solution to several problems inherent to the Industrial Era economy. First, by the 1920s and 1930s, an increasing number of workers were earning their living through manual or day-wage labor that depended on their ability to engage in physical activity (
[link] ). As their bodies weakened with age or if they were injured, their ability to provide for themselves and their families was compromised. Second, and of particular concern, were urban widows. During their working years, most American women stayed home to raise children and maintain the household while their husbands provided income. Should their husbands die or become injured, these women had no wage-earning skills with which to support themselves or their families.
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