>>526386>smooths income across the lifecycleEvery country with social programs for child-rearing and social security have achieved this effect, with more universal and well-funded programs smoothing income more. In the USA this manifests as the earned income tax credit, because Americans are subhumans who need their pills hidden in slices of cheese and their cash transfers hidden in tax credits. This program has long been underfunded, but it was recently expanded which will have good long-term effects for working-class families, and possibly reduce the decline of the native birth rate according to some but I doubt it. Countries where social democrats have had more power in constructing stronger welfare states have such programs as unconditional cash transfers, as opposed to the uyghardly means-testing imposed by neoliberals eager to cut big-gubmint costs at the expensive of administrative efficiency and the social safety net. Intergenerational poverty is four times stronger in the USA (which has weak tax-and-transfer programs) than it is in Denmark, which has stronger tax-and-transfer programs thanks to the objective moderate wing of fascism. See first attached image.
>protects people from income shocksThis is the "social safety net" part of the welfare state. When the economy goes into a recession, incomes go down, leading to mass unemployment, and both of these things lead to a fall in aggregate consumption. The correct response to this is to take out a deficit to bring consumption back up and stimulate the economy through public work programs (to put all the unemployed people to work) and, you guessed it, cash transfers (so people can buy new products). This results in inflation but if you raise taxes after the shock it should rebalance the money supply. Better for the rich to pay for the costs of a recession than the unemployed poor. Compare the 2008 recession, when the American and European governments alike were dominated by neoliberal economics policy that opposed stimulus. Bush's response to the recession was more austerity and tax breaks for the rich, because of course it was. Similar austerity policies were enacted in the EU, where third-way neolibs had come to dominate politics in the end-of-history era. A year later Obama passed a larger stimulus bill (opposed by all republicans and many democrats) which was nevertheless very teeny tiny compared to what the keynesians recommended. The recovery was very slow. Compare this to the 2020 recession, when the US passed a large stimulus bill (three times the size of Obama's) including money (not a tax credit in a slice of cheese, but an honest check), although Biden actually promised more money and never came through on it. The USA recovered faster than it ever had from an economic recession. The unemployment didn't last a decade like it did during the great depression (which was ended by succdems btw).
>fixes informational and market failures in savings, credit, and insurance marketsEvery country with universal healthcare does this. Insurance markets are notorious for market failures. In a completely free market, insurance companies have an incentive to not provide coverage to someone if the expected monetary value of doing so is negative. Because demand for healthcare is inelastic and unequal (people will pay whatever they have to for healthcare, and different people have different healthcare needs), it's in an insurance companies interest not to provide insurance to, for example, disabled people. If they do provide them insurance, they'll prefer to do it at a much higher price than anyone else, since it wouldn't be profitable otherwise. Any country with universal healthcare FORCES doctors to treat disabled people ON THE TAXPAYER'S DIME, and as a result countries with such social programs have higher life expectancies and higher qualities of life. The gold standards for such systems are countries where the healthcare industry is completely nationalized, like in Norway. The shit standard for this is the pre-ACA USA, and it still has a shittier healthcare system than every other OECD country despite being able to afford basically anything it wants.
>providing a dignified life for non-workersAny society with unemployment, disability, child, and social security benefits does this. This is the main purpose of the welfare state. Children, elderly, and the disabled don't work. The non-working portion of the global population is about 50%. In older, more high-trust traditional societies, there were informal highly personal institutions such as the church and the nuclear family which took care of these people's needs, but in large, low-trust diverse societies with economies of scale you can no longer rely on the goodwill of the community to keep you alive. People need the right to not starve in the street just because they don't have rich parents. These benefits are strongest in countries where the social democrats have held the most power, like, you guessed it, the Nordic countries. Most enticing is Norway, which has two social wealth funds which pay dividends to its citizens which will increase over time as the proportion of public to private investment grows. Xu Gao proposes a similar system for China to stimulate aggregate demand and reduce inequality, and Matt Bruenig has argued for the same policy in the USA. This and other forms of universal basic income ought to be the centerpieces of any highly-affluent welfare state worth its salt, but it seems we will still have to wait a while before the overton window shifts back to such radical ideas. The last 20 years have seen a slow return to form from socdem parties, as the dominance of free-market ideology has slowly waned since the height of the blackest reaction following the collapse of the iron curtain.
>All the social democracy I know is betrayal by social democrats.The Marxist-leninist says to the socdem: sir, all of your parties capitulated to neoliberalism in the 1980's and 90's.
The social democrat says: sir, all of your parties capitulated to neoliberalism in the 1980's and 90's.