7
■ vl>l ^wCl,
As a mere side remark it may be observed that the welfare
state has in a way by its automatic stabilisation
contributed to a relatively high degree of tolerance
against unemployment and restrictive ( monetatistic )
policy: By protecting the business from the worst
effects of the recession which are instead taken by the budget
the edge of the opposition against recession policies has
been blunted. At the same time the better protection of
at least some of the unemployed against great income loss
has led to a weakening of the response also here.
U Ki SUvwt-
4 j It should not be forgotten that hte budgetary situation
at present ismade much worse by the interest policy
(prbbably the most important effect of monetarism is on the
budget). An OECD table recently showed that without interest
on the public debt almost all countries in the last ten
years or so (except one year) showed practically no deficits.
fSut the full employment budget probably has been over
extended and the complaints about taxation cannot be brushed
aside from a long run policy point of view. .
Wv-c- -iyt, > l ' e ;
Feldstein notes tow reasons^: Financial implication of
legislation was sometimes not suffiently calculated
(entitlements) and spending was based on an expectation
of growth which was subsequently not realised.
4^ The suspicion that public services lack sufficiet planning
and efficiency cannot be easily dismissed.
P” One of the aims of welfare policies, by and large,
seems to have been missed: The aim of re-distribution of income
In practice welfare services, it appears, are largely paid
out of taxes on mass incomes and mass consumption.
See Ljj .Nicholson, Redistribution of income in the United
Kingdom in 1959,1957 and 1953. Londoh 1965