In the USA Biden aims to address social problems by expanding the scope and size of the government social spending. However, such idea is highly debatable and can lead to negative economic consequences. In the article “Can We Afford a Welfare State?” by N. Gregory Mankiw, the author discusses the potential risks associated with President Biden and other officials to implement this idea. The article emphasized the proses and cons of such project, including economic and social factors and the changes in the value of Americans.
The proposed program might cause the opposite effect, so that risks to the economic prosperity and inequality might be created as also raise in taxes can led to dissatisfaction among wealthy people. The author of the article agrees with this idea, and states that it would be beneficial (Mankiw 1). However, it is essential for government to value person, their work, so the idea to take more taxes from wealthy people would lead to inequality. The government aims to raise $3.5 trillion social spending bill, and this idea is useful, but the way of its achieving should be different (Mankiw 1). The author states, that higher taxes might distort incentives and impede economic growth. According to the article, a value-added tax may be the best way to finance a larger welfare state. For instance, similar idea of high taxes was already implemented in Western Europe, as a result the G.D.P. of European inhabitants is much lower, because these countries offer more generous safety net (Mankiw 2). Hence, the approach to the implementation of the program should be carefully chosen, to avoid inequality and the lowering of life quality of the Americans.
To sum up, the article emphasizes the importance of considering the best approach to the given project. The author researches the Biden`s initiative and consider its efficiency and necessity. In addition, the article illustrates the importance of balancing between prosperity and compassion. As a result, the more appropriate results without harm for society would be achieved. The idea of creating a welfare state is significant, but the right approach should be implemented.
Work Cited
Mankiw, N. Gregory. “Can We Afford a Welfare State?” The New York Times, 17 Sept. 2021, p. 1-2.