Welfare reform

Welfare reforms are changes in the operation of a given welfare system, with the goals of reducing the number of individuals dependent on government assistance, keeping the welfare systems affordable, and assisting recipients to become self-sufficient. Classical liberals, libertarians, and conservatives generally argue that welfare and other tax-funded services reduce incentives to work, exacerbate the free-rider problem, and intensify poverty. On the other hand, socialists generally criticize welfare reform because it usually minimizes the public safety net and strengthens the capitalist economic system. Welfare reform is constantly debated because of the varying opinions on the government's determined balance of providing guaranteed welfare benefits and promoting self-sufficiency. Within the last two decades, welfare systems have been under extreme scrutiny around the world. Demographic changes like the post-war "baby boom" followed by the subsequent "baby bust", coupled with economic shifts such as the 1970 oil shocks, led to aging populations and a dwindling working force. In turn, there became an increased dependency on social welfare systems, which inevitably brought up the issue of welfare reform. U.S. systems primarily focused on reducing poor single-parents need for welfare, through employment incentives. The U.K focused primarily on reducing general unemployment through the New Deal. The Netherlands emphasised reforming disability programs, and Latin America focused primarily on pension reforms. German Chancellor Otto von Bismarck was one political leader who attempted to put an end to socialism by proposing government healthcare. He approved the 1883 Health Insurance Act which was the first to introduce compulsory government-monitored health insurance. The German legislation ensured contributory retirement and disability benefits. Participation became mandatory. Many historians trace the beginnings of contemporary welfare in Europe and America to Bismarck's Health Insurance law.