Ever since John McCain accused Barack Obama of having a socialist agenda, numerous commentators--from Rush Limbaugh to Bill O’Reilly to Glenn Beck--have been warning that Obama may infect American capitalism with European socialism. Even the Rev. Mike Huckabee chimed in: “When you punish people for making more money and you reward them for nothing, that is socialism.”
One has to wonder where the anti-socialist crowd has lived since the Great Depression of the 1930s when the federal government began introducing large-scale socialist welfare programs. On August 14, 1935, President Franklin Roosevelt signed the Social Security Act guaranteeing every employed American a pension at age 65, to be financed with mandatory contributions from employees and employers. The program strongly resembled the Old Age Pension and Disability Insurance system which anti-socialist Chancellor Bismarck had introduced in Germany in 1879.
The Social Security Act also provided assistance to the states for Aid to Dependent Children (ADC), the blind, and the old who did not qualify for Social Security. In addition, FDR’s administration gave the U.S. its first unemployment insurance system. Social security coverage was further expanded with survivors’ benefits in 1939 and disability insurance in 1954. The taxing provisions of the social security legislation were upheld by the U.S. Supreme Court in Steward Machine Company v. Davis (1937).
Under President Lyndon Johnson, the Economic Opportunity Act of 1964 launched the “war on poverty.” It established the Job Corps for untrained unemployed youths, Headstart for early childhood education, and Food Stamps for people with little or no income. Today virtually all food stamp costs are paid by the federal government. While welfare rolls tended to decline, the nation’s high poverty rates--embarrassingly high for a well-endowed country--remain an unsolved problem.
The 1965 amendments to the Social Security Act created Medicare, a federal program of medical insurance for old people, and Medicaid which provides care assistance for low-income persons. Also in 1965, the Housing and Urban Development Act expanded on the previously created public housing authorities and allowed rent supplements in privately owned buildings.
Acting for the American people, it was Congressional majorities that voted for all of our existing socialist programs and government controls. Those who oppose democratic socialism should stand by their conviction and refuse to accept such socialist benefits as social security payments.
The Obama administration certainly is adding more government programs and controls in its attempt to overcome the economic recession and the mismanagement of our capitalist financial institutions. We taxpayers now own shares in banks and automobile companies and may soon experience more government involvement in health care and education.
The opposition to the federal government’s huge expenditures of borrowed funds may prove be justified if the Obama administration’s recovery efforts fail. That opposition, however, will not reverse the recession, as long as it does not offer an effectively working alternative measures that will cure what ails the economy. It is also not enough to let crucial financial institutions and other industries go bankrupt and thus cause more business failures, more unemployment, and more economic misery.
Private enterprise is certainly the ideal economic system. Whenever its practitioners fail, however, government has predictably been called upon to come to the rescue. That is how democratic socialism has developed and expanded throughout the world, for better or worse.