THE CRISIS OF THE WELFARE STATE

COLOMBIAN:

THE CRISIS OF THE WELFARE STATE

Written be:
Omar Colmenares Trujillo

With the recent presentation of a financing law by the Colombian government, Iván Duque revealed not only a deficiency in the national budget of the nation, but also the unsustainability of the future.

This financing law has another aspect that is the law of public expenditure or as others call tax reform, the truth is that this unsustainability is critical and it obeys according to experts for several reasons.

The first of the reasons is the corruption that costs the country USD $ 17 million per year to the Colombians, and that requires a real structural reform of the state, but this decision is in the hands of corrupt politicians, so no measures will be adopted. .

But there is another reason that I want to occupy in this article and is due to the saturation of the budget by the amount of subsidies and benefits that the country gives to the most disadvantaged classes, In Colombia there is something called SISBEN which is a System of Identification of Potential Beneficiaries of Social Programs that, through a score, classifies the population according to their socioeconomic conditions.

And it is through the SISBEN that you can access several programs for the poorest population. Among those that stand out:

BIENESTAR FAMILIAR: Early childhood, children's homes, child development centers and community homes.

Icetex: Access, You Choose and Support Subsidy

Minagricultura: Rural housing and comprehensive land subsidy

Sena: Rural youth

Minsalud: Subsidized regime

Minvivienda: Housing in kind

PROSPERIDAD SOCIAL: More families in action, Youth in action and Red Unidos

MINTRABAJO: Colombia mayor

MiNEDUCACION: Being a paid pilo

SERVICIO MILITAR: Military notepad exemption

But there are also other types of subsidies in Colombia such as:

Types of subsidy.

Food Subsidy

It is the payment made to public employees of certain salary levels to contribute to their maintenance in the amount and conditions established by law. When the employing entity supplies the power to its servers, there will be no place for this recognition.

"Article 10, The food subsidy for public employees of the entities referred to in this decree, which accrues monthly basic allocations not exceeding one million six hundred and five thousand five hundred and seventy-one pesos ($ 1,605,571) m / cte ., will be fifty-seven thousand two hundred and fifty Source: Decree of 995 2017 - Public Function

Unemployment benefit.

It is a benefit granted to people who are unemployed and who have contributed to a compensation fund. This subsidy is regulated by Law 1636 of June 18, 2013.

Monetary subsidy or monetary quota

It is a monetary resource that is delivered monthly to members for each of the dependents.

Health Subsidy.

The Subsidized Regime is the mechanism by means of which the poorest population of the country, without capacity to pay, has access to health services through a subsidy offered by the State.

Subsidy for educational support.

It is an economic aid that the National Government approved to help resolve the personal expenses generated by the attendance of students. This applies to university students.

Transportation Subsidy.

Transportation assistance is a benefit for employees who earn up to 2 minimum monthly salaries, whose purpose is to help them with transportation costs from home to the workplace. This being so, there are ways to request the recognition of this right and even the payment of damages. The transport aid is not part of the salary, so it should not be included as a basis for the calculation of the parafiscal contributions and neither for the contributions of health and pension.

According to the national department of statistics of that country, (Dane) 385,000 people left poverty last year and 467,000 left behind the condition of extreme poverty. Multidimensional poverty also fell and for some analysts this is due to the innumerable benefits and subsidies that the state provides.

Welfare State is the one that seeks that governments provide their most needy citizens, from the cradle to the grave: Education, housing, health, retirement pensions, employment in the official bureaucracy, unemployment benefits, disability ... affordable public transport, childcare, reparation of the victims, care for the displaced.

The welfare state is a concept of government in which the state protects and promotes the economic and social well-being of the citizens, based upon the principles of equal opportunity, equitable distribution of wealth, and public responsibility for citizens unable to avail themselves of the minimal provisions for a good life.[1] The sociologist T. H. Marshall described the modern welfare state as a distinctive combination of democracy, welfare, and capitalism.

Otto von Bismarck, the first Chancellor of Germany, created the modern welfare state by building on a tradition of welfare programs in Prussia and Saxony that began as early as in the 1840s, and by winning the support of business. Bismarck introduced old age pensions, accident insurance and medical care that formed the basis of the modern European welfare state. His paternalistic programs won the support of German industry because its goals were to win the support of the working class for the German Empire and reduce the outflow of immigrants to the United States, where wages were higher but welfare did not exist.

The United Kingdom, as a modern welfare state, started to emerge with the Liberal welfare reforms of 1906–1914 under Liberal Prime Minister Herbert Asquith. These included the passing of the Old-Age Pensions Act in 1908, the introduction of free school meals in 1909, the 1909 Labour Exchanges Act, the Development Act 1909, which heralded greater Government intervention in economic development, and the enacting of the National Insurance Act 1911 setting up a national insurance contribution for unemployment and health benefits from work.

The Colombian case public debt reaches 45% of GDP, the fourth largest in the region, only behind Brazil, Argentina and Costa Rica. All of this is largely due to bureaucratic growth, the commitments made with the FARC and the disproportionate spending on state advertising during the Santos era. 100% subsidized housing, strengthening of Families in Action, the subsidized health regime and a hundred other programs, which only make the real economic well-being of the country unviable, which, although - incidentally - is constitutionally called an Economy Social de Mercado, to sound cooler, has nothing to do with the ESM proposed by Ludwig Erhard and other German ordoliberals.

It could be said then that in a welfare state we think about the short term, regardless of the future, under the logic of: today we are alive, tomorrow we do not know. The duration of the welfare state depends on the wealth that a country has accumulated and the taxes it collects. If it is a rich country, as is the case in France, it will be able to last longer; If, on the other hand, it is a middle-income country like Venezuela, the fall is more hurried. However, whatever the case of study, the welfare state fails, despite the optical illusion that it may create in the beginning. The generation that begins with the welfare revolution may not be affected, but it is the coming generations that must deal with its economic, political and socio-cultural costs.

According to figures from the National Planning Department, the Colombian state is allocating about 72 billion dollars per year to social subsidies.

These State aids are distributed through 65 different programs, equivalent to nine percent of the Gross Domestic Product (GDP) of the country, more than five times what the first phase of the Bogota Metro costs, or 120 times what it costs. that cost corruption in Reficar.

Seen in this way, the previous figures seem astronomical, and that is why there is no shortage of those who call themselves scandal. But before making a judgment on the magnitude - or even on the benefits and disadvantages of subsidies - it is convenient to reflect on its nature.

Three kinds of subsidies

1.       There are programs - for example "Families in Action" - where the State simply transfers a sum of money to the beneficiaries. These are the monetary subsidies, which raise the household income (or the profits of the company receiving the subsidy in cases such as the "Agro Secured Income" program). One of the characteristics of monetary subsidies is the possibility of identifying the beneficiary.

2.     Non-monetary subsidies do not imply transfer of money but the provision of the good or service with a lower price for its recipient. This is the case, for example, with government spending on mass transportation, education, health, technical advice or home public services.

The incidence of these subsidies on the payment capacity of the beneficiary is indirect, because thanks to the subsidy the family (or company) improves the disposable income to acquire the goods of their preference. This idea can be illustrated in several ways:

- Thanks to the hot food that children receive in school canteens, households spend less on the market, and free resources to buy other goods.

-The families' ability to pay also improves when the rates for public services are reduced, or when instead of paying for a private university, the children are admitted to the public university.

In this type of subsidies, the beneficiary can not always be identified, as in the cases of subsidized mass transport or free concerts, to mention only two examples.

3. The government considers that pensions are also a subsidy, and includes them within the 72 trillion package. But pensions must have special treatment for three important reasons:

First, because its amount is very high (close to 38 billion pesos in 2017, or more than half of the total "subsidies")

Second because at least part of the pensions in charge of the State have been or are paid by the workers under the modality of direct contributions or of values implicitly or explicitly deducted from their monthly salary.

And third, because pensions put on the table the discussion about citizen rights, and open the door to the discussion about the convenience of society advancing towards a universal basic income.

The nature of pensions is very different from that of other expenses and should not be considered as a subsidy. As with monetary subsidies, in pensions it is possible to determine the beneficiary.

Economists agree that public spending - and specifically subsidies - must serve its purpose at a reasonable cost ("efficiency") and help improve the distribution of income ("equity").

GENERATION NEET

NEET is the English acronym of the expression Not in Employment, Education or Training (neither works, nor studies nor receives training).

Free houses, subsidies to the pension and to the health, aid in feeding and schooling, of employment and public services, are only some examples of an economy more and more focused in the gratuity. The worst thing of all is that 30% of this aid - according to a report by Professor Hugo López - falls into the hands of the non-poor, that is, people with sufficient income to live independently, in other words middle class or even high.

People have to survive, but we must improve the targeting to get the 'cast' and achieve a healthy balance between aid and public policies for Colombians out of poverty.

Laziness has been allowed in real life on behalf of the great welfare state, but the left has also deified it, while demonizing in work. Mr. Paul Lafargue, author of "The Right to Laziness" who became Karl Marx's son-in-law, developed a whole theory on the subject, where he praises leisure and presents as the only desirable model of life the one where maximum work is carried out three hours a day. day and the rest of the time is dedicated to the pleasures.

The sad thing is that this way of seeing life is increasingly popular among young people. The old idea that "work dignifies man" seems to have no space in a society where leisure and laziness are the ultimate ends.

The fashionable youtubers, singers and idols of the youth invite their followers to leave their jobs and go on a trip to "take advantage" of life. Having hard jobs and getting up early is for losers because what is good is going to party every night and being able to wake up when you want, without the pressure of a boss.

Laziness has been allowed in real life on behalf of the great welfare state, but the left has also deified it, while demonizing in work. Mr. Paul Lafargue, author of "The Right to Laziness" who became Karl Marx's son-in-law, developed a whole theory on the subject, where he praises leisure and presents as the only desirable model of life the one where maximum work is carried out three hours a day. day and the rest of the time is dedicated to the pleasures.

In mid-2013 the United Kingdom made a considerable cut with state aid, many choose a life at the expense of subsidies.

Bill Clinton in the late 90s proposed a new philosophy "If you want to keep receiving money, you have to contribute in some way to the community."

It is necessary to withdraw aid to those under 25 years of age who neither study nor work, nor do they intend to train to change their situation between the ages of 16 and 24 years.

Younger pregnant teenagers, they believe that getting pregnant is the best choice of life.

Familias en acción for example, is the Social Prosperity program that offers all those families with children under the age of 18 who require financial support to have a healthy diet, growth and development controls on time and permanence in the system. school.

My project is not the elimination of the welfare state, as the experts argue that these policies are in the way of capitalism, and what I propose with this article is the reduction of public spending, the reduction of the welfare state from the targeting of needs.

Colombia looks at the discussion that several years ago was given in Europe and the United States, the only way to save the necessary welfare state, is to reduce equity, we need to reduce the state that is a road without return, but this reduction must accompanied as I have initially argued, of structural reforms in all areas, such as reducing the congress and rethinking the soils of politicians.

Goodbye….