[M]odern states have tended to extend benefits to the better-off, partly because of lobbying and partly as a way of buying the support of the wealthy for the welfare state. All this is well illustrated in Suzanne Mettler’s book “The Submerged State”, which shows how these hidden subsidies can distort voters’ view of the way that government policy works; a 2008 poll found that 57% of Americans denied ever using a government programme. But when shown a list of 21 actual programmes, including student loans and home-mortgage interest deduction, 94% of the deniers turned out to have benefited after all.
[Would be interesting if TJS’s research centre could do something on whether the middle class benefits from govt subsidies: could kill the PAPpies pt abt housing and education subsidies]
Universal benefits are very expensive. But targeting benefits requires means-testing, an instrusive process that causes hard cases at the margin. And restricting benefits to the poorest may weaken political support for the whole system, along the lines highlighted by Mr Romney; people may believe that the hard-working “us” are subsidising the feckless “them”.