10 highlights
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But since the crisis has—ironically —necessitated an expansion and change in the nature of government’s role, an age-old debate has been revived. The debate about big government
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Countries are spending like never before—not even during the wars had governments blown budgets to the skies as they are today. The Bretton Woods Sisters (the International Monetary Fund and the World Bank) are egging them on; the concept of deficits has vanished from their lexicon.
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British Prime Minister Boris Johnson contradicted his Conservative predecessor Margaret Thatcher’s famous endorsement of pure individualism made in 1987, “There is no such thing as society”
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Even distress relief bears tell-tale signs of the state’s weakness. The most vulnerable are to receive the least.
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It is front-loading targeted cash transfers due through the year—with small hikes—to select sections of the distressed population covered under existing programmes. But the package leaves out millions of informal workers and the unorganized sector.
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A welfare state takes on twin roles: it provides (not necessarily produces) merit goods such as healthcare and education to everyone. It may also redistribute incomes so as to alter the income distribution created by markets.
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The term welfare state, in fact, became popular after the publication in 1942 of the Beveridge Report, the blueprint for the construction of the British welfare state by the Labour Party at the end of World War II
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The welfare state is sometimes mistakenly believed to be a left-wing creation. Actually,William Beveridge, former director of the London School of Economics, had proposed it as a complement to free markets.
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In 1948, the Labour government introduced universal welfare institutions such as the National Health Society (NHS) and National Insurance. By the 1960s, social security supplanted defence as the most expensive item of government expenditure.
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Economic history of other countries with large welfare programmes shows that growth slows down after the fiscal burden of the government is increased