Debates over the best way to combat social issues continue to cause major divisions in the United States — and nowhere more sharply than in its politics.
While the Left firmly believes that government intervention and spending on social-security schemes are a must, the Right fights back with the claim that these are either not required or simply not effective. It is an argument as old as the modern American state itself.
As the global centre of free-market capitalism, the country tends to look to the private sector to shoulder social responsibility and to keep government's interventions into public life restricted.
That is the interesting question that has come up for debate in the United States, thanks to a proposal by Senator Bernie Sanders. He wants large employers — those with 500 or more people working for them — to pay a tax of one dollar for every dollar that their employees and their families receive from federal social-security benefits.
Senator Sanders, who was a candidate in the Democratic Party's primaries to choose its nominee for President, describes himself as a "Democratic Socialist" — a position once considered too radical for American politics, before his spirited challenge to Hillary Clinton in the nomination race changed what was sayable.
But, contrary to what one might expect from such a figure, he wants the private sector to take responsibility for social benefits, so that big employers don't pass the financial responsibility for those benefits on to the government. He describes the current arrangement as "corporate welfare."
01Reaction to Sanders' plan
After the initial surprise that a "Democratic Socialist" wanted the private sector — and not the government — to take on the load of social benefits, the reaction to Senator Sanders' plan turned out to be quite interesting. Among others, it won the support of Tucker Carlson, the right-wing anchor on Fox News.
This strange coming-together of the populist left and the populist right is not unprecedented; we saw much the same thing during the 2016 presidential race. But others were skeptical. The Center on Budget and Policy Priorities — a think tank that closely studies poverty-related matters and is considered politically liberal — warned that the plan would hurt the interests of the very people it seeks to help.
02The concept of privatizing social schemes
Beneath the specifics of one senator's plan lies a larger, ongoing debate: can private corporations actually do a better job of administering social-security schemes? The record is not encouraging.
Florida's food-stamp experiment
- In the 2000s, Florida embarked on a project to bring market-based solutions to the provision of federal food stamps.
- The whole thing turned out to be a disaster — with roughly $200 million in cost overruns.
- And this is not an isolated example of the failure of privatizing social-welfare schemes. Indiana hired IBM in 2006 to run welfare eligibility processing, then cancelled the contract in 2009 amid widespread complaints, and Texas ended a similar arrangement with an Accenture-led consortium after only a couple of years.
It is clear that while the private sector is certainly far better at managing business enterprises, social-security programs require a sensitivity and caution that private interests can often lack — if not be outright indifferent to.
